Customer Relationship Management: Introduction and Importance

CUSTOMER RELATIONSHIP
MANAGEMENT
INTRODUCTION AND IMPORTANCE
Dr. Tejinderpal Singh

Assistant professor
University Business School
Panjab University Chandigarh
Few Real Life Examples
Defining CRM
CRM is often so broad that it lacks

definition. If you cant define it , how can
you assess it? No one knows what it is , but
we know we have to do it
CRM starting to Live Up its promise, Wall Street &
Technology,204)
Definition of CRM
CRM is a strategic approach that is concerned with
creating improved shareholder value through the
development of appropriate relationships with key
customers and customer segments.
CRM units the potentials of relationship marketing
strategies and IT to create profitable, long term
relationship with customers and other key stakeholder.
CRM provide enhanced opportunities to use data and
information to both understand customers and cocreate value with them.
This requires a cross functional integration of
processes,
people,
operations
and
marketing
capabilities that is enabled through information,
technology and application.
Key processes in CRM

1.
2.
3.
4.
5.
Strategy Development
Value Creation
Multichannel Integration
Information Management
Performance Assessment
CRM a as Software package , process, system

or technology
CRM systems are parameters-adjustable
software packages that are intended to
integrate and manage all aspects of customer
interaction within organization and so
considerably improve the ability of the
organization to handle customer service,
sales , marketing, online transactions and
orders.
As data storage and Analysis

CRM is the process of storing and analyzing
the vast amounts of data produced by sales
calls, customer service centers and actual
purchases, supposedly yielding greater
insight into customer behaviour.
CRM also allows a business to treat different
types of customers differently- in some cases,
for instance by responding more slowly to
those who spend less or charging more to
those who require more expensive
handholding.
As a cultural change within the organization

itself
CRM is the first and foremost a cultural

change that is a different way of doing
business, enabled with powerful technology
at every touch point
As management practice that focuses on

relationship as opposed to Transaction
A broader definition of CRM would include all
activities that turn casual customer into
loyal customers by satisfying or exceeding
their requirements to the extent that they
will buy again
As a strategy that focuses on Current

Customers :
CRM comprises the business process an
organization performs to identify, select ,
acquire , develop, retain and better serve
customers. These process encompass an
organization end to end engagement with
its customers and prospects over the
lifetime of its relationship with them .
Objectives of CRM
1. Identify potential customers
2. Understanding customer needs , both current and
latent
3. Differentiating profitable from unprofitable customers
and segments
4. Decreasing attrition by increasing value and
satisfaction
5. Increasing usage of current products and services
6. Increasing usage of a greater number of company s
products and services
7. Increasing customer service and satisfaction
8. Increasing referrals
9. Winning back lost customers
10. Moving up the customers in relationship hierarchy from
stranger to acquaintances to friend to partner
11. Integrating marketing and sales efforts throughput the
Four major perspectives on CRM
Strategic CRM
Operational
Analytical
Collaborative
Strategic CRM
Strategic
CRM
is
focused
upon
the
development of a customer-centric business
culture.
This culture is dedicated to winning and
keeping customers by creating and delivering
value better than competitors
The culture is reflected in leadership behaviours, the
design of formal systems of the company, and the
myths and stories that are created within the firm
Operational CRM
Operational CRM automates and improves
customer-facing and customer supporting
business processes.
CRM software applications enable the
marketing, selling and service functions to
be automated and integrated
Marketing automation
Sales force automation
Service automation
Marketing automation
Marketing automation (MA) applies technology to
marketing processes.
Campaign management modules allow marketers to
use customer-related data in order to develop,
execute and evaluate targeted communications and
offers.
Customer targeting for campaigning purposes is, in
some cases, possible at the level of the individual
customer, enabling unique communications to be
designed.
Sales-force automation
SFA applies technology to the management
of a companys selling activities.
The selling process can be decomposed into
a number of stages, such as lead
generation,
lead
qualification,
needs
identification, development of specifications,
proposal generation, proposal presentation,
handling objections and closing the sale.
Service automation
Service automation allows companies to
manage their service operations, whether
delivered through call centre, contact centre,
web or face-to-face.
Analytical CRM
Analytical CRM is concerned with
capturing,
storing,
extracting,
integrating, processing, interpreting,
distributing,
using
and
reporting
customer-related data to enhance both
customer and company value.
Collaborative CRM
Collaborative CRM is the term used to
describe the strategic and tactical alignment
of normally separate enterprises in the
supply chain for the more profitable
identification, attraction, retention and
development of customers
Tangible Components of CRM

Five Key Areas of Any CRM system
Multichannel Marketing
Data Base/Data Warehouse/Data Mart/
Data Mining/Saas
Touch Points
Call centers / customers contact centers
Sales force automation
360 Degree view
Five Key Areas of Any CRM system
Mining &
Analysis
Systems
Data
Warehousing
Back office and External Systems
Physical Link
Marketing
Sales
Customer Service
Front Office
CRM Rules &
Work Flow
CRM measures
Customer
Multichannel Managemnt (Marketing)
Why do e-commerce websites

promote the use of their
mobile applications to shop?
Data Base/Data Warehouse/Data Mart/

Data Mining/Saas
Touch Points
Call centers / customers contact centers
Sales force Atomization

360 Degree view of customer
Important Business Construct related to CRM

Customer Life Time Value(CLV)
In
marketing,customer
lifetime
value(CLV) is a prediction of the net profit
attributed to the entire future relationship
with acustomer.
Privacy
Permission based marketing
Customization vs Personalization
Recency ,Frequency and Monetary Value

(RFM)

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CUSTOMER RELATIONSHIP

Dr. Tejinderpal Singh

Few Real Life Examples

CRM is often so broad that it lacks

Key processes in CRM

CRM a as Software package , process, system

As data storage and Analysis

As a cultural change within the organization

CRM is the first and foremost a cultural

As management practice that focuses on

As a strategy that focuses on Current

Four major perspectives on CRM

Tangible Components of CRM

Five Key Areas of Any CRM system

Back office and External Systems

Multichannel Managemnt (Marketing)

Why do e-commerce websites

Data Base/Data Warehouse/Data Mart/

Call centers / customers contact centers

Sales force Atomization

Important Business Construct related to CRM

Permission based marketing

Recency ,Frequency and Monetary Value

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