MCS CRM

RESEARCH PAPER
ON
‘CRM IN SERVICES’
SUBMITTED TO: SUBMITTED BY:

Prof. A.K.Sinha Atul Amrutkar
Danish Ali
Deepak Shukla
RESEARCH OBJECTIVE
Impact and Usefulness of ‘Customer Relationship Management’ in Service

Industry
Customer Relationship Management, abbreviated “CRM,” is the term for a

business strategy that is designed to improve customer service. CRM is also
designed to increase customer satisfaction and gain new customers, thus
increasing a business’ revenue. CRM is a term that can be applied to
software and an entire business strategy.
Customer Relationship Management (CRM) is increasingly becoming the

key focus area for several companies. With increasing levels of competition,
success in the industry is often mirrored in having higher customer
satisfaction levels. Various solution providers helps companies to rework
and re-align their CRM applications towards the customer's strategic
business drivers, while maintaining a high focus on the costs and System
optimization possibilities.
The essence of the information technology revolution and, in particular, the

World Wide Web is the opportunity to build better relationships with
customers than has been previously possible in the offline world. By
combining the abilities to respond directly to customer requests and to
provide the customer with a highly interactive, customized experience,
companies have a greater ability today to establish, nurture, and sustain
long-term customer relationships than ever before. The ultimate goal is to
transform these relationships into greater profitability by increasing repeat
purchase rates and reducing customer acquisition costs.
The need to better understand customer behavior and focus on those

customers who can deliver long-term profits has changed how marketers
view the world. Traditionally, marketers have been trained to acquire
customers, either new ones who have not bought the product category before
or those who are currently competitors’ customers. This has required heavy
doses of mass advertising and price-oriented promotions to customers and
channel members. Today, the tone of the conversation has changed from
customer acquisition to retention. This requires a different mindset and a
different and new set of tools. A good thought experiment for an executive
audience is to ask them how much they spend and/or focus on acquisition
versus retention activities. While it is difficult to perfectly distinguish the
two activities from each other, the answer is usually that acquisition
dominates retention.
SECONDARY RESEARCH
STATISTICAL DATA
• The impetus for this interest in CRM came from Reichheld where he
showed the dramatic increase in profits from small increases in
customer retention rates. For example, his studies showed that as little
as a 5% increase in retention had impacts as high as 95% on the net
present value delivered by customers (advertising agencies) with a
low of 35% (computer software). Other studies done by consultants
such as McKinsey have shown that repeat customers generate over
twice as much gross income than new customers. The considerable
improvements in technology and innovation in CRM related products
have made it much easier to deliver on the promise of greater
profitability from reduced customer “churn.”
• For example, the results from a 1999 McKinsey study on the impact
of improvements in a number of customer-based metrics on the value
of Internet companies. The metrics are divided into three categories:
customer attraction, customer conversion, and customer retention. As
can be seen, the greatest leverage comes from investments in
retention. If revenues from repeat customers, the percentage of
customers who repeat purchase, and the customer churn rate each
improves by 10%, the company value was found to increase
(theoretically) by 5.8%, 9.5%, and 6.7% respectively.
Emerging Marketplace
The fact is that Sales force continues to attract enterprise customers, their
offerings for integration and customization have received a boost from
recent announcements, and there are documented customers who are now
buying the development and deployment technology without regard for the
CRM components.
CRM @ HP
With the right Customer Relationship Management (CRM) solutions, you

can unlock and leverage valuable data within your corporation for more
profitable and effective customer interactions.
HP Services delivers a variety of CRM solutions that can help you:

• Improve the Total Customer Experience (TCE) for your customers
• Improve the productivity of your customer-facing employees
• Drive incremental revenue
• Lower your cost of customer contact
If customer have already implemented a major CRM package, HP can help

them increase the return on the investments they've already made.
The right approach to CRM, backed by the right level of experience HP

Services CRM professionals are contact center specialists who help
customers determine the best way to cut costs through consolidation or
customer self-service solutions. They also help the customer manage their
responses to e-mail inquiries and integrate Web presence into their CRM and
contact-center strategies.
CRM@IBM
IBM CRM Management Services helps customers deploy and manage their
CRM applications, CRM technology infrastructure and call center
operations.
The service is offered in a modular fashion and includes the following key
components:
• Ongoing application hosting and management services for marketing,

sales and customer service applications. IBM supports industry leading
CRM packages from Siebel, Peoplesoft, SAP and Kana.
• IBM's Industry Based Templates. IBM's Industry Based Templates are

pre-configured, prepackaged work products that were built using industry
best practices and intellectual capital. The Industry Based Templates are
proven to shorten implementation time from 10% - 20%.
• Integrated Business Intelligence. Provides four key performance
indicators "out of the box": Customer Value, Customer Behavior, Contact
Value and Performance of Operator. We also offer other key performance
indicators that cut across other channels and applications. Integrated
business intelligence leads to improved customer targeting, up-selling, and
cross-selling and campaign execution.
• Customer interaction centers. Professional and efficient agents using

state of the art call center technology to help acquire service and retain
customers.
IBM CRM Management Services provides end-to-end CRM services, from

helping customers decide what to do, helping customers do it and helping
customers manage it. IBM integrates the piece parts to provide seamless
"plan, implement and run" CRM services. Very few service providers are
capable of providing end-to-end CRM services.
Banking Innovations - Does CRM Qualify?
Regulation and technological improvements are responsible for the vast

majority of innovations in banking over the past quarter century. The
introduction of personal computers and the proliferation of ATMs in the
1970s captured bank management’s attention. The regulatory changes in the
1980s fueled much of the industry’s growth, then downsizing as bankers
focused on amassing market presence which resulted in significant merger
activity. Recent technological improvements are at the root of bankers’ focus
as well as a target for their significant investment dollars today. In fact,
according to recent projections, bankers and their financial service company
brethren will spend almost $7 billion this year on CRM and increase that by
14 percent each year for the next several years.
Looking at this CRM phenomenon in light of the drivers of banking

innovation since the 1970s, one might wonder if CRM itself is the
innovation, or (conversely) the technology, once again.
Much is being written about CRM. Bankers at all points of the CRM
spectrum are looking for a way to quantify their return on investment —
either what it actually is or, if just starting out, what it should be and over
what period of time should the value be realized. Ironically, the answer to
this question may lie in a simple review of a few known quantities generated
from historical innovation.
Look, for example, at ATMs. What drove many bankers to invest in ATMs
was the promise of reduced branch cost, since customers would use them
instead of a branch to transact business. But what was discovered is that the
financial impact of ATMs is a marginal increase in fee income substantially
offset by the cost of significant increases in the number of customer
transactions. The value proposition, however, was a significant increase in
that intangible called customer satisfaction. The increase in customer
satisfaction has translated to loyalty that resulted in higher customer
retention and growing franchise value.
Guess what? Internet banking, a product of the 1990s, shows similar

characteristics. Again, bankers invested believing that the Internet was a
lower-cost delivery channel and a way to increase sales. Studies have now
shown, however, that the primary value of offering Internet banking services
lies in the increased retention of highly valued customer segments. Again,
the intangible called customer satisfaction drives the value proposition.
Now we explore CRM. CRM is not another ATM or Internet bank. It is not a
checking account, a stock or a mortgage. In fact, CRM is not anything a
customer should even know about! You will never sell your customer your
CRM, will you? So, one can conclude that CRM is not tangible. If it’s
intangible, can it be expected to produce a tangible return? Probably not, or
at least not with any direct financial value exclusively linked back to the
investment in CRM.
Is CRM another innovation, or the result of innovation? I think both. CRM

is primarily driven by the innovation of technology, but unlike other
technological innovations, CRM has power to help bankers quickly and
directly improve customer satisfaction. CRM is an added dimension to
ensure that what the customer expects is consistent with what the bank is
prepared to deliver. One expert in bank CRM initiatives recently said that
CRM is an approach that is less focused on providing the right services to
the customer than attracting customers who are the right fit for what the
bank has to offer. Further, the primary value of CRM is its potential as a
customer retention tool. People are starting to measure CRM in terms of
increased customer satisfaction rather than ROI.
So how much of a return can you expect from your CRM investment, and
when can you expect it? Refer to your reasons for continuing to offer ATM
and Internet banking services. The answer for CRM is the same.
DISCUSSIONS
A major purpose of this paper is to provide a managerially useful, end-to-end
view of the CRM process from a marketing perspective. The basic
perspective taken is that of the customer, not the company. In other words,
what do managers need to know about their customers and how is that
information used to develop a complete CRM perspective?
The basic model contains a set of 7 basic components:
1. A database of customer activity.

2. Analyses of the database.
3. Given the analyses, decisions about which customers to target.
4. Tools for targeting the customers
5. How to build relationships with the targeted customers.
6. Privacy issues.
7. Metrics for measuring the success of the CRM program.
How Does CRM Work?
Essentially, CRM works by gathering information about customers and

analyzing the information collected. An example of this would be
supermarket discount cards (I.E. Kroger Plus Cards, ACME cards, Giant
Eagle cards, etc…). When a consumer scans his or her card, and then his or
her items, the items that customer bought are entered into a database. This
gives businesses an accurate idea of which customers buy what. Businesses
then analyze this information. After analyzing the data collected, businesses
can adjust their marketing campaigns and increase sales. Customer
Relationship Management brings the company closer to the customer. CRM
closes a “relationship gap” that can be formed between the business and its
customers.
CRM is also useful for customer service. Businesses can use automated
CRM applications to analyze customer complaints, or compliments, and
change the business processes accordingly. Interestingly enough, CRM
products also run many automated call-centers for businesses (I.E. customer
service systems). CRM applications and practices are used to make
businesses more efficient and improve customer satisfaction.
What Can a Business Gain From Using CRM?
There are many goals that businesses have when implementing CRM
techniques and applications. The business wants to improve customer
service, which will subsequently improve customer satisfaction. The
business also wants to maximize revenue by advertising the right products to
the right people. In other words, businesses want to know what customers
want. Once a business finds what a customer wants through a CRM method,
the business can then provide the customer exactly what he or she desires.
This will lead to returning customers, and the gaining of new customers.
CRM processes also are designed to monitor all of the contact between
customers and companies. Maintaining a positive relationship with one’s
customers is an essential element in business. Well-rounded CRM works to
ensure that this element exists.
CRM Applications
CRM applications are applications that run on the same principals as

Microsoft Word and Excel. There are many values that can be filled in. Once
these values are filled in, the data needs to be analyzed and interpreted. A
major advance in CRM application technology is the invention of
applications, which can collect data, and analyze it at the same time. This
new technology will make CRM even more effective and efficient.
Conclusion
For any business, successful Customer Relationship Management navigation

is becoming increasingly important in today’s competitive business world.
Customer expectations are always increasing, and business services must
increase along with these expectations. CRM is the method through which
businesses can connect with their customers and therefore serve them better.
Businesses with successful CRM strategy and applications will notice a
large increase in sales, customer satisfaction, and simply the overall success
of the business.

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RESEARCH PAPER

SUBMITTED TO: SUBMITTED BY:

Impact and Usefulness of ‘Customer Relationship Management’ in Service

Customer Relationship Management, abbreviated “CRM,” is the term for a

Customer Relationship Management (CRM) is increasingly becoming the

The essence of the information technology revolution and, in particular, the

The need to better understand customer behavior and focus on those

With the right Customer Relationship Management (CRM) solutions, you

HP Services delivers a variety of CRM solutions that can help you:

If customer have already implemented a major CRM package, HP can help

The right approach to CRM, backed by the right level of experience HP

• Ongoing application hosting and management services for marketing,

• IBM's Industry Based Templates. IBM's Industry Based Templates are

• Customer interaction centers. Professional and efficient agents using

IBM CRM Management Services provides end-to-end CRM services, from

Banking Innovations - Does CRM Qualify?

Regulation and technological improvements are responsible for the vast

Looking at this CRM phenomenon in light of the drivers of banking

Guess what? Internet banking, a product of the 1990s, shows similar

Is CRM another innovation, or the result of innovation? I think both. CRM

The basic model contains a set of 7 basic components:

1. A database of customer activity.

How Does CRM Work?

Essentially, CRM works by gathering information about customers and

What Can a Business Gain From Using CRM?

CRM applications are applications that run on the same principals as

For any business, successful Customer Relationship Management navigation

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