Module 04

Managing Different Stages of CRM

Dr. Savita Sharma

Customer Acquisition:
• It refers to gaining new customers.

• Acquisition costs of customers are those, that are

involved in influencing a potential customer to buy
the company’s product or service.

• It includes the research cost, marketing cost, and

accessibility cost of the particular product.
Customer Acquisition Strategies:
Define Your Target Audience

Use the Right Acquisition Channel

Leverage Video Content

Do Giveaways

Create High-Quality Content Regularly

Focus on SEO

Run a Referral Program

Create Optimized Landing Pages

Customer Retention Strategies:
Offer customer service “surprises”

 Set customer expectations.

 Build trust through relationships.

 Use automation to re-engage customers.

 Improve KPIs around customer service.

 Leverage customer feedback surveys.

 Develop a frequent communication calendar.

 Over deliver on your promise.

CRM tools for Customer Retention:
Campaign Management Software: It tracks the up-
selling and cross-selling campaigns and their
effectiveness in terms of profit margins.
Data Mining: It helps in preparing customized offers by
referring to the stored transaction history of customers
and suggesting probability of what customer might buy.
Event-based Marketing: It helps to send offers to the
customers when an important event is triggered. For
example: a bank sends its customer the interest rates on
fixed deposit on opening a savings account with a bank.
Cont…
Channel Integration: It helps to manage working of
various communication channels harmoniously to avoid
creating and sending different customized offer for the
same product and customer.

Market Optimizing Software: It enables marketers to

manage their campaigns across various customer
segments, handle budget constraints, track various costs,
etc.
The add-on-selling:
Improve opportunities to increase sales by adding
related products as suggestions for up-sell, cross-
sell, accessories, or substitutes. 

These related products are displayed as suggestions

to customers.

Defining related products will help your customers

to purchase more.
Customer Equity:
Customer equity is a result of customer relationship
management.
The theory of Customer Equity can be defined as the
value of the potential future revenue generated by a
company’s customers in the entire lifetime of the firm. 
Customer Equity represents the value that current and
future potential customers will provide to a company
during the entire lifespan of their relationship.
It is also quite important because it incorporates many
other measures important to the marketing team of the
firm and presents it as a point measure or as a
probability distribution.
Customer Metrics:
Customer metrics are techniques for measuring the
value of customers to the company and company’s value
to them.
It include factors such as customer satisfaction and
loyalty measurements that are known to correlated with
revenue growth and margin improvement. 
It tracks the performance of the company.
It gives a better control over sales and marketing.
Departments that are most associated with the influence
of CRM systems are Sales, Marketing and Service.
Sales:
Number of prospects
Number of new customers
Number of retained customers
Close rate
Renewal rate
Number of sales calls made
Number of sales calls per opportunity
Amount of new revenue
Number of open opportunities
Sales stage duration
Sales cycle duration
Number of proposals given
Marketing:
Number of campaigns
Number of campaign responses
Number of campaign purchases
Revenue generated by campaign
Number of new customers acquired by campaign
Number of customer referrals
Number of web page views
User goal completion rate on the web
Time per website visit
Customer lifetime value
Cross-sell ration
Up-sell ratio
Email list growth rate
Service:
Number of cases handled
Number of cases closed the same day
Average time to resolution
Average number of service calls per day
Complaint time to resolution
Number of customer call backs
Average service cost per service interaction
Percentage compliance with SLAs
Calls lost before being answered
Average call handling time
Summary:
Net promoter Score: A measure of how likely a
customer is to recommend your business to their
friends.
Customer Profitability: A measure of how much profit
a customer (or group of customers) are making the
business.
Customer Retention: Measures the loyalty, or how
successful you are retaining your existing customers.
Conversion Rate: Measures how well you are turning
prospects into actual customers.
Relative Market Share: Measures your share of
customer market relative to your competitors.
Customer Loyalty:
It is important because – Revenue, Referrals,
Acquisition cost is always higher than retention cost.
Customer loyalty measures how likely customers are
to return and their willingness to perform partner
shipping activities for the organization.
Customer satisfaction is a requisite for loyalty.
A loyalty program typically involves giving customers
free merchandise, early access to sales, products and
coupons. Loyalty programs have been proven to be
extremely successful in driving repeat sales for
brands.
Benefits:
Continued patronage

Reduced marketing costs

Decreased price sensitivity

Partnership activities

Leads to an increased Average Order Value (AOV)

Types of Loyalty Program:
1-Point-Based Loyalty Program
This is the simplest and most common loyalty program model where customers
earn a specific amount of points for every transaction or specific action. These
points can then be redeemed for discounts, products or services.

2-Tier-Based Loyalty Program

A tiered loyalty program works to provide both short term rewards and long term,
aspirational benefits once a customer reaches a specific level.

3-Fee-Based Loyalty Program

A fee-based loyalty program appeals to highly engaged customers who have
already made up their mind what they want out of your loyalty program. For fee-
based loyalty programs to be effective, it needs to offer a very relevant value
proposition to the customer whether it’s in form of free shipping, special discounts
or priority access to sales
Cont…
4-Cashback Loyalty Program
Cashback programs are simple and straightforward - spend
X amount and get Y amount as cashback. They have been
effective in reducing customer churn rates in a variety of
industries like retail, banking and insurance.
5-Reward Loyalty Program
Also known as a coalition loyalty program, this type of
program involves a brand partnering with another brand to
offer rewards and incentives to a shared group of
customers.
Customer Life Time Value:
CLTV is a prediction of all the value a business will derive
from their entire relationship with a customer.
20% of your customers generate 80% of revenue.
Because we don’t know how long each relationship will
be, we make a good estimate and state CLV as periodic
value.
Rather than thinking about how you can acquire a lot of
customers and how cheaply you do so…. CLTV helps you
think about how to optimize your acquisition spending
for maximum value rather than minimum cost.
CLTV:
Generate real ROI on customer acquisition
Enhance your retention marketing strategy
Create more effective messaging, targeting and nurturing
Improve your behavioral triggers
Improve output from customer support
How to calculate CLV:
 P: Profit generated by customer each year
 N: Number of years that they are a customer of the brand
 C: Cost to acquire the customer
 CLV = PxN-C
Measuring Customer Satisfaction:
• Customer satisfaction is a measure of how products
and/or services supplied by a company meet or surpass
customer expectation.

• It is also a key performance indicator (measure) within

business and is often part of the Balanced Scorecard.
• Delighted customers/clients are profitable on every
company business.

• It can be used as a basis of monitoring, evaluating and

developing new products and process that contribute to
company’s performance management.
Purpose of Customer Satisfaction:
1. The collection, analysis and dissemination of CS data send a
message about the importance of tending to customers and
ensuring that they have a positive experience with the
company’s goods and services.

2. Satisfaction is perhaps the best indicator of how likely it is

that the organizations’ customers will make further purchases
in the future. Since current research has now focusing on the
relationship between customer satisfaction and retention.
Methods in managing customer satisfaction:
Two ways: Direct method and Indirect method
Direct Method: Directly contacting customers and getting
their valuable feedback is very important. Following are
some ways by which they can be contacted:
a) Getting customer feedback through third party agencies.
b) Direct marketing, in-house call centres, complaint
handling department could be treated as first point of
contact.
c) Getting customer feedback through face to face
conversation or meeting.
d) Feedback through appreciation letter.
e) Feedback through surveys and questionnaires.
Methods in managing customer satisfaction:
Indirect Method: Following are indirect methods of getting
feedback regarding customer satisfaction.
a) Customer complaint: Customer’s complaints are the issues and
problems reported by the customer to supplier with regards to ant
specific product or related service. These complaints can be
classified under different segments according to the severity and
department.

b) Customer Loyalty: A customer is said to be loyal if he revisits

supplier on regular basis for purchases. These loyal customers are
the satisfied ones and hence they are bounded with a relationship
with the supplier. Hence by obtaining the customer loyalty index,
supplier can indirectly measure customer satisfaction.
Conflict Management:
It is a serious disagreement or argument, typically a
protracted one. It could be a fight, a battle or struggle,
especially a prolonged struggle; strif.
Opposition arising from disagreements due to
inconsistent objectives, thoughts, or emotions within or
among individuals, teams, departments or
organizations.
All unresolved conflict decreases productivity and
lowers performance.
To manage the conflicts in the organization is termed as
conflict management.
Types of conflict:
Goal conflict
Cognitive conflict
Affective conflict
Conflict Management Style:
Avoidance
Smoothing
Forcing
Compromise
collaborative
Customer Complaint Management:
An expression of dissatisfaction made to an
organization, related to its product or services, or the
complaints-handling process itself, where a response or
resolution is explicitly or implicitly expected.
Why do customers complain?
- Their expectations have not been met.
- To release their anger.
- To help improve the service.
- Because of concern for others who also use the service.
How do we handle customer complaint?
Listen
Repeat
Apologize
Acknowledge
Explain action
Thank
Follow up
Remember not to it personally
Remain calm
Focus on the problem and not person
Turn unhappy people into happy customers
Questions?