CUSTOMER RELATIONSHIP MANAGEMENT

Customer Relationship Management Notes

Module 1

1. Introduction to CRM
Customer Relationship Management (CRM) is a strategy that companies use to
manage and analyze customer interactions and data throughout the customer
lifecycle. The goal is to improve customer service relationships, assist in
customer retention, and drive sales growth.

2. Definition of CRM
CRM is defined as a process in which a business or organization administers its
interactions with customers, typically using data analysis to study large amounts
of information.

3. Emergence of CRM Practice

The practice of CRM emerged due to the increasing importance of customer-
centric business strategies. Advances in technology, growing competition, and
the need for personalized customer experiences have driven the adoption of
CRM systems.

4. Factors Responsible for CRM Growth

- Top Management Commitment and Support: Leadership's dedication to CRM
initiatives is crucial for success.
- Technological Advancements: Continuous updates and innovations in CRM
software.
- Increased Competition: Businesses aim to gain a competitive edge through
better customer management.
- Customer Expectations: Customers demand more personalized and efficient
service.

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5. CRM Process
- Data Collection: Gathering customer information from various touchpoints.
- Data Analysis: Analyzing the data to understand customer behavior and
preferences.
- Customer Segmentation: Grouping customers based on similar characteristics.
- Implementation: Applying insights to enhance marketing, sales, and customer
service efforts.

6. Framework of CRM
- Operational CRM: Automates customer-facing processes such as sales and
customer service.
- Analytical CRM: Analyzes customer data for strategic decision-making.
- Collaborative CRM: Facilitates communication and collaboration among
various departments and stakeholders.

7. Benefits of CRM
- Improved Customer Satisfaction: Enhanced service and personalized
experiences.
- Increased Sales: Better understanding of customer needs leads to more sales
opportunities.
- Efficient Processes: Automation reduces manual work and errors.
- Better Customer Retention: Stronger relationships result in higher customer
loyalty.

8. Types of CRM
- Operational CRM: Manages daily operations related to customer service and
sales.
- Analytical CRM: Focuses on analyzing customer data and converting it into
actionable insights.
- Collaborative CRM: Enhances collaboration between departments to improve
customer service.
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9. Scope of CRM
CRM's scope includes managing all aspects of interactions with current and
potential customers across marketing, sales, customer service, and technical
support. It is applicable in various industries and business sizes.

10. Customer Profitability

Customer profitability analysis helps businesses identify which customers are
the most profitable. This allows for more effective resource allocation and
development of strategies to increase profitability from less profitable
customers.

11. Features and Trends in CRM

- Mobile CRM: Access CRM data on mobile devices.
- Social CRM: Integrate CRM with social media platforms.
- AI and Automation: Enhance data analysis and customer interactions.
- Cloud-based CRM: Offers flexibility and scalability.

12. CRM and Cost-Benefit Analysis

Implementing CRM involves analyzing costs such as software, training, and
maintenance against benefits like increased sales and improved customer
satisfaction. This analysis helps in making informed investment decisions.

13. CRM and Relationship Marketing

Relationship marketing focuses on long-term customer engagement rather than
short-term goals. CRM systems support relationship marketing by providing
tools and data to manage and enhance customer interactions.

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Module 2
1. Customer Value
Customer value is the perceived worth of a product or service in comparison to
its cost. It is influenced by the quality, benefits, and utility of the product or
service as perceived by the customer.

2. Customer Expectation
Customer expectations are the preconceived ideas that customers have about the
quality and performance of a product or service. Meeting or exceeding these
expectations is crucial for satisfaction and loyalty.

3. Customer Satisfaction
Customer satisfaction is a measure of how well a company's products or
services meet or exceed customer expectations. High satisfaction levels lead to
increased customer loyalty and repeat business.

4. Customer Centricity
Customer centricity is a business strategy that focuses on creating a positive
experience for the customer by ensuring that all aspects of a company prioritize
the customer's needs and preferences.

5. Customer Acquisition
Customer acquisition refers to the process of attracting and converting new
customers. Effective acquisition strategies are essential for business growth.

6. Customer Retention
Customer retention is the ability of a company to keep its customers over time.
Retention strategies include loyalty programs, personalized experiences, and
excellent customer service.

7. Customer Loyalty

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Customer loyalty is the likelihood of previous customers to continue to buy

from a specific organization. Loyal customers often provide repeat business and
referrals, making them highly valuable.

8. Customer Lifetime Value (CLV)

Customer Lifetime Value is a metric that estimates the total revenue a business
can expect from a single customer account throughout the relationship.

9. Customer Experience Management (CEM)

Customer Experience Management involves overseeing and optimizing all
customer interactions to meet or exceed customer expectations and enhance
satisfaction, loyalty, and advocacy.

10. Customer Profitability

Customer profitability is the difference between the revenues earned from and
the costs associated with the customer relationship. It helps businesses identify
and focus on their most valuable customers.

11. Enterprise Marketing Management (EMM)

Enterprise Marketing Management encompasses strategies and technologies
used by companies to manage and analyze marketing campaigns, customer data,
and marketing activities to optimize customer engagement and return on
marketing investments.

12. Customer Satisfaction Measurements

Customer satisfaction measurements involve tools and methods such as surveys,
feedback forms, and net promoter scores (NPS) to gauge customer satisfaction
levels and identify areas for improvement.

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13. Web-based Customer Support

Web-based customer support includes online resources like FAQs, chatbots, live
chat, and help desks that assist customers in resolving issues quickly and
efficiently.

Module 3
Introduction
Customer Relationship Management (CRM) planning is essential for
establishing effective customer relationships and improving business outcomes.
It involves various steps, each critical to the successful implementation of a
CRM strategy.

Steps in Planning

1. Building Customer Centricity

- Ensuring the organization's culture, structure, and processes prioritize
customer needs and experiences.

2. Setting CRM Objectives

- Defining clear, measurable goals for what the CRM initiative aims to
achieve, such as improved customer satisfaction, increased sales, or enhanced
customer retention.

3. Defining Data Requirements

- Identifying the types of customer data needed, how it will be collected,
stored, and analyzed to inform CRM activities.

4. Planning Desired Outputs

- Determining the desired outcomes of the CRM implementation, such as
specific metrics for customer engagement, conversion rates, or service
efficiency.

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5. Relevant Issues While Planning the Outputs

- Addressing potential challenges such as data privacy concerns, integration
with existing systems, and ensuring user adoption across the organization

Elements of CRM Plan

- Customer Data Management
- Efficient collection, storage, and analysis of customer data.

- Technology and Tools

- Selection of appropriate CRM software and tools to support CRM activities.

- Training and Support

- Ensuring employees are well-trained to use CRM tools effectively.

CRM Strategy: The Strategy Development Process

1. Understanding Customer Needs

- Gaining insights into customer preferences and behaviors through data
analysis.

2. Aligning with Business Goals

- Ensuring the CRM strategy aligns with the overall business objectives and
enhances customer relationships.

Customer Strategy Grid

- Segmentation

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- Dividing the customer base into distinct groups based on characteristics or

behaviors to tailor marketing and service efforts effectively.

- Engagement Tactics
- Developing specific strategies to engage each customer segment, such as
personalized marketing campaigns or loyalty programs.

Module 4
Introduction
Customer Relationship Management (CRM) encompasses various strategies and
technologies to manage and analyse customer interactions and data throughout
the customer lifecycle. This section covers CRM marketing initiatives, sales
force automation, campaign management, call centres, and the practice of CRM
in different sectors.

CRM Marketing Initiatives

1. Personalized Marketing
- Utilizing customer data to create personalized marketing messages that
resonate with individual preferences and behaviors.
2. Campaign Management
- Planning, executing, and monitoring marketing campaigns to target specific
customer segments effectively.
3. Customer Segmentation
- Dividing customers into groups based on shared characteristics to tailor
marketing efforts and improve response rates.

Sales Force Automation (SFA)

1. Streamlining Sales Processes
- Automating repetitive tasks such as data entry, order processing, and
tracking customer interactions to improve sales efficiency.
2. Sales Forecasting
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- Using CRM tools to analyze sales data and predict future sales trends,
helping to set realistic sales targets.
3. Lead Management
- Managing leads from initial contact through conversion, ensuring no
potential sales opportunities are missed.

Campaign Management
1. Integrated Campaigns
- Coordinating marketing campaigns across multiple channels to ensure a
consistent message and maximize reach.
2. Performance Analysis
- Tracking the effectiveness of campaigns through metrics like click-through
rates, conversion rates, and ROI.

Call Centers
1. Customer Support
- Providing efficient and effective customer service through call centers,
addressing customer inquiries and issues promptly.
2. Data Collection
- Gathering customer feedback and data during interactions to improve service
quality and customer satisfaction.

Practice of CRM

1. CRM in Consumer Markets

- Focuses on understanding consumer behaviors, preferences, and purchasing
patterns to enhance customer satisfaction and loyalty.

2. CRM in Services Sector

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- Emphasizes personalized services and building long-term relationships to

ensure customer retention and satisfaction.

3. CRM in Mass Markets

- Uses mass marketing strategies combined with CRM insights to reach a
broad audience while maintaining personalized interactions.

4. CRM in Manufacturing Sector

- Integrates CRM with supply chain management to improve customer
service, track orders, and manage relationships with distributors and retailers.

Module 5

Issues and Problems in Implementing CRM

1. Lack of Communication
- Decisions are often made by top management without proper
communication to all stakeholders, leading to resistance and confusion.
2. Data Quality Issues
- Poor data quality and data integration problems can hinder the effectiveness
of CRM systems.
3. User Adoption
- Employees may resist using new CRM systems due to a lack of training or
perceived complexity.

Information Technology Tools in CRM

1. Automation Tools
- Tools for automating marketing, sales, and customer service processes help
streamline operations and improve efficiency.
2. Analytics Software

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- Analytics tools allow businesses to analyze customer data and generate

insights for better decision-making.

Challenges of CRM Implementation

1. Integration with Existing Systems
- Integrating the CRM system with existing IT infrastructure can be complex
and resource-intensive.
2. Cost
- The high cost of CRM implementation can be a significant barrier, especially
for small and medium-sized enterprises.
3. Change Management
- Managing organizational change and ensuring all employees adapt to the
new system is a critical challenge.

CRM Implementation Roadmap

1. Scenario Analysis
- Analysing different scenarios to understand the potential impact of CRM on
the business.
2. Defining Objectives
- Clearly defining the objectives and goals of the CRM implementation.
3. Planning and Execution
- Detailed planning and phased execution of the CRM implementation process
to ensure smooth integration.

Measuring CRM Performance and CRM Metrics

1. Customer Retention Rate
- Measures the percentage of customers the company retains over a specific
period
2. Customer Satisfaction Score

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- Assesses how satisfied customers are with the company’s products or

services.
3. Sales Growth
- Evaluates the increase in sales attributed to CRM efforts.

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