Bizwerx Innovation & Mobility Hub by Dr. Cassandra Little
Customer relationship management at Maruti Suzuki
1. Customer Relationship
Management at
Maruti Suzuki
Submitted on 20-Feb-2012
Group#08 (Section B)
Basu Agarwal (FT12416)
Bikram Satapathy (FT12417)
Saloni Goel (FT12455)
Shruti Mishra (FT12462)
Srinivas Dhenuvukonda (FT12467)
Great Lakes Institute of Management, Chennai 1
2. Index
Page
1.0 Introduction 3
2.0 Various Technologies at Maruti Suzuki 4
Level of CRM
3.0 Analytical CRM 5
3.1 Data base 5
3.2. Direct marketing-Data analysis 6
3.3 Cross-selling of various value added services 6
3.4 Customer Retention for Service at dealers, satisfaction, thereby, sales retention
for the future 7
4.0 Operational CRM 8
4.1 Campaign management for promoting the special offers 10
4.2 SX4 Pre-launch Campaign management on MSD CRM 4.0 10
4.3 Insights for Dealer Development Division (DDD) & used car division (TRUE
VALUE) 10
4.4 Loyalty card implementation (Auto card) 11
5.0 Strategic CRM 11
6.0 Philosophical CRM 12
7.0 Challenges addressed by MS Dynamics CRM 4.0 14
8.0 Future challenges of Maruti’s CRM 14
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3. 1.0 Introduction
Maruti Suzuki is the Indian passenger car market leader for several decades. It has crossed the 10
million cumulative domestic sales mark here today. It is the only automobile company in India
to cross this milestone.
The Company, which had rolled out its first car in December 1983, attained 5 million domestic
sales in February 2006.
The next 5 million domestic sales have been achieved in six years.
The 10 millionth vehicles, a Red Swift Vxi, was dispatched to Coimbatore on February 9th, 2012
from the Company's Manesar plant.
While Maruti 800 and Omni powered sales for almost two decades, the Alto has been India's
best-selling car for the last over 7 years. In recent years, the success of WagonR and Swift,
among others, has accelerated the Company's progress towards the 10 million mark.
Dedicating this milestone to customers, Shinzo Nakanishi, Managing Director and CEO, Maruti
Suzuki India Limited, said, "Maruti Suzuki's success story is closely linked with the success
story of India in the last two decades. Even as India has grown and transformed, Maruti Suzuki
has evolved to meet changing demands. He said, we will continue to drive the growth and
evolution of India's car market. I thank employees, dealers and suppliers for their support and
commitment".
Top five Maruti Suzuki models in cumulative sales
Models Cumulative Units sold
M800 26.36 lakh units
Alto + K10 19.08 lakh units
Omni 14.37 lakh units
Wagon R 11.14 lakh units
Swift 6.85 lakh units
Despite holding strong position in the market, Maruti Suzuki losing market share drastically
due hyper competition prevailed with the entry of foreign players such as Ford, Chevrolet,
Toyota, Honda & Renault etc. With that competition in place, the marketers now had to focus
on customer oriented activities to stay in touch and retain them.
Also, Maruti used communicates with the dealers and dealers, in turn, the dealers communicate
with the end customers and vice versa. With this, there is lot of widened gap of understanding
the customer needs and wants. With that dissatisfied customers are growing immensely. there
is no proper channelizing system to deploy the customer complaints and then solve them on
time. Diagnosing these dynamic changes in the customer market, Maruti wanted to
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4. communicate with the existing customers directly and understands the requirements and serve
them better. Hence, Maruti had to initiate various customer focused marketing activities such
introducing Customer Relationship Management (CRM) to retain the customers, acquire new
customers & increase the customer satisfaction& loyalization.
Maruti Suzuki Maruti Suzuki
Dealer Dealer
Customer Customer
Fig 1(a). Traditional Communication Fig 1(b). Direct Communication through CRM
2.0. Various technologies at Maruti Suzuki
HCL technologies implemented the CRM at Maruti Suzuki. They have implemented Microsoft
Dynamics CRM 4.0 in a span of approximately 6 months.
Application Technology Suppliers
Dealers
Management Oracle 9i
system Wipro, Oracle
ERP Oracle-business suite Wipro, Oracle
CRM Microsoft dynamics CRM HCL, Microsoft, SAS
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5. 3.0 Analytical CRM
3.1. The data base
The database is the pre requisite for any kind of data analysis that is done in the analytical CRM
module. Since Maruti has established network of data centers through dealer transactions and
toll free number-call center data capturing etc. Maruti through various channels.
Those are the following.
1) Any Time Maruti- toll free call center (operated by HCL Technologies at Noida).
All kinds of queries are logged at (ATM) and the kind of information received into the
following areas.
a) New sales queries due to campaigning or advertising by Maruti
b) Existing customer sales queries/complaints
c) Service complaints
These databases are automated to get migrated with respective operational CRM
software modules from the call Centre.
2) Dealer Management System (DMS), dealer transaction module which is connected
through extranet to the central server of Maruti.
a) All the queries (sales/service/true value) are logged onto the DMS portal by
the channel partners.
b) The same data is migrated to the Microsoft dynamics Software at Maruti.
The database from these sources is used for need analysis after the data is cleaned using various
data warehouse/data mining techniques.
CTPI
MSD
DMS server RDBMS SAS
platform
DW
ATM HCL call
Centre DA
server
Fig 2. Customer Database flow for analytical CRM
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6. 3.2. Direct marketing-Data analysis
The problem with direct marketing is with the fact that success rates of direct marketing are
very low. For example, some survey suggests that national average of catalog sales success ratio
is about 2% ! With such success ratio, selling low profit margin products through direct
marketing may not be feasible. Analytic methods that can select customers who are more likely
to buy products are needed. The following techniques can be used in selecting customers;
• Customer profiling
• Customer segmentation
• Customer scoring
• Predictive modeling
These techniques can reduce marketing cost by eliminating customer groups who are unlikely to
place orders. The techniques that are extensively used in Direct Mail Marketing are RFM
analysis, clustering loyalty scoring etc.
3.3. Cross-selling of various value added services
Cross-selling is to sell other products to existing customers. To increase the success rate, other
products tend to be co-products or related products. For example, a customer who bought a
SWIFT car will likely to purchase extra accessories, extended warranty and Auto card.
The following chart shows customer purchasing behaviors;
Cells in red color indicate that there is positive relationship between two products. That is,
when customers buy one product, they tend to buy the other product as well. Cells in blue color
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7. indicate the opposite. When customers buy one product, they tend to not buy the other
product. Brightness of cells indicates the relative strength of relationships. The chart shows that
the following product pairs have strong positive relationship;
• Product P ~ Product O
• Product P ~ Product F
• Product O ~ Product F
Also notice that most product pairs show negative relationship (in blue). Knowing negative
relationship can prevent from wasteful marketing efforts! The strongest pairs as follows;
• Product E ~ Product H
• Product G ~ Product J
• Product G ~ Product H
3.4. Customer Retention for Service at dealers, satisfaction, thereby, sales
retention for the future
In the current scenario of Indian passenger car industry, customer churn is a big problem as the
competitors are pouring sops on customer’s .Also; it is the duty of OEM to ensure that every
customer is retained by the dealer for service needs. As in these days, the margins on sales of new
cars for dealers is almost vanished or narrowed down, it is the service business that makes the
dealers viable. Also, acquiring a new customer is costly when compared to retain the existing
customer. Hence, retention of customers for both future purchase of the cars and current service
needs is necessary for Maruti Suzuki.
For obvious reasons, the most important strategy in customer retention is to identify groups
that are likely to leave (potentially to rival providers) through performing retention
(alternatively defection) rate analysis. Once they are identified, preventive measures can be
developed and actions can be followed to prevent defections. The following techniques can be
used to identify customer groups of defection risk;
The main objectives of MS Dynamics CRM at the analytical level are to provide the predictive
modeling for probable dissatisfied customer in the service and provide the insights to the related
department. The satisfaction scores and churn scores can be calculated at this level
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8. • Defector profiling
Develop profiles of risky groups based on demographic, geographic and psychographic
attributes.
• Defection scoring
Build neural network predictive models that can predict likelihood of defection.
4.0. Operational CRM
Operational CRM generally refers to services that allow an organization to take care of their
customers.it provides support for various business process, which can include sales, marketing
and service. The operational CRM addresses the various issues such as high customer turnover,
ROI on marketing and promoting, customer satisfaction scores etc.
CTPI MS
MSD Microsoft Office
DMS server RDBMS SAS
Dynamics
platform
DW CRM 4.0
ATM HCL call Interface
Centre DA
server
Fig 3. Operational CRM Architecture
A campaign is a record for storing the details about a marketing effort that uses multiple tasks to reach
customers. The following diagram illustrates how to use a campaign in Microsoft Dynamics CRM to track the
marketing efforts.
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9. When everything is ready to plan a new marketing campaign, the first steps are often
gathering information and determining your audience. From there, one can create your team
and your budget for the campaign and get ready for launch. All this information, as well as
data about the campaign tasks, can be stored in a campaign record, allowing you easy access
to the details of a particular campaign. You can also run reports on the campaigns and see
what marketing works best for your organization.
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10. 4.1. Campaign management for promoting the special offers
CRM division of Maruti Suzuki runs campaign management using MSD CRM 4.0 to target
various segments of customers using the data available from analytical CRM.these kind of
campaigns are run to promote the products with some offers such as cash discounts, bundling
offers, exchange offers etc. CRM will contact each and every customer with customized
marketing program. Interested customers will respond back, the responses from the customers
are again captured by CRM database. This can be further analysed for insights using analytical
CRM frame work. Hence, CRM is an iterative process.
4.2. SX4 Pre-launch Campaign management on MSD CRM 4.0
The launch of SX4 is an example of Maruti’s CRM campaign management for positioning a new
product using MSD CRM successfully. The objectives were to position the car in the sedan
segment in competion with Honda City, to conquer new customers and loyalize the previous
model Baleno. An integrated communication campaign was launched that coordinated TV and
print campaigns, direct marketing, preview events, electronic media, as well as dealer marketing.
The goal of entire marketing was to select relevant prospects for the actual launch in the
upcoming period. The activity started by one-to-one bulk email marketing followed by print and
TV advertising. Based on the responses of this activity, the prospects are called for preview
launch, thereby; the contact details of these hot prospects are passed to dealers for the follow up
once the product entered into the actual market. The effectiveness of the campaign was
measured in terms of response rate, cost per contact, ROI on campaign & quality of prospects.
Overall the campaign was extremely successful, not only premium positioning but also in terms
of leading sales in the targeted segment (Honda Siel /Ford fiesta/Hyundai Verna).
4.3. Insights for Dealer Development Division (DDD) & used car division
(TRUE VALUE)
There are two major responsibilities of the DDD division.
1. Improving the customer satisfaction of the existing customers through dealer activities.
2. Enhancing dealer network by analyzing the demographic variables.
Analytical CRM will provide the satisfaction scores (defection scores) upon which there will
be action taken by the relevant division for improving the customer satisfaction measures.
This would help the dealers to increase profitability by retaining them.
Also, analytical CRM will provide the cluster analysis, upon which the DDD will take action
to appoint a new dealer in the city or close down the existing one.
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11. The TRUE VALUE division undertakes trade-in activities of any car in the market.
Operational CRM will provide recommendations based on the data from DMS or Maruti e-
commerce portal of exchange of cars or other sources.
4.4. Loyalty card implementation (Auto card)
Maruti Suzuki loyalty card is a unique loyalty reward program designed exclusively for the
owners of Maruti cars. The program is loaded with powerful features and offers the customers
best services along with exciting rewards and privileges. With this program the customers will
not only get reward points on spending but also on the contribution to the ever increasing sales
of Maruti cars. Like, whenever the customers recommend his friends or colleagues, he/she would
earn reward points which can redeemed while buying any product or service from Maruti.
Maruti ties up SBI Bank to penetrate into rural market.
MSD CRM 4.0 will help the Loyalty program department in tracking the customers and their
purchase benefits so that it can provide insights and recommendations for one-to-one marketing
through SMSs and emails. This would help Maruti retain these customers and offer custom
solutions to each customer.
5.0 Strategic CRM
Customers
Owners
partners
Strategic
CRM
Employees
Suppliers
competito
rs
Fig 4: Strategic CRM framework for Maruti Suzuki
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12. Owners: A successful CRM strategy should create value for not only customers but for also
investors or owners. Its top-down approach. Hence, management commitment is crucial to
implement successfully.
Customers: customers are the major focus of the CRM strategy
Partners: partners such as dealers commitment in supporting the data is crucial for success of
the CRM.
Suppliers: Suppliers (HCL, SAS , Microsoft etc)the success of the CRM strategy largely
depends on the quality of the product chosen and quality of service provided by them and
commitment.
Management: Employees: Key stake holders are employees in this process. There will be
resistance for change of existing systems to new CRM strategy. Top management seriousness
will ensure adaptation of CRM among the employees.
Competitors: competitors practices influence the selection of CRM as it is a competitive
advantage that it can create over the competitors.
6.0 Philosophical CRM
The following are the Maruti Suzuki’s philosophies for implementing CRM
To identify customer success factors
To create customer based culture
To adopt customer based measures
To develop end to end process to serve customers with the existing products
To maintain competitive edge in serving the customer
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13. The overall activities of CRM division mapping of those of other divisions in Maruti Suzuki is
given in the following Table.
CRM Division of Maruti Suzuki
Divisions of
Maruti Analytical
Operational CRM Strategic CRM Philosophical CRM
CRM
To implement CRM
on Microsoft
Cluster analysis,
Campaign Dynamics CRM
Marketing RFM analysis,
management 4.0.plotform. In-
Clustering
house developed and
customized.
To identify customer
success factors
Lead management, To create customer
complaint based culture
Sales Need analysis,
management, sales To adopt customer
satisfaction based measures
To develop end to end
Network process to serve
Dealer
Clustering enhancement, New customers with the
Development dealer establishment existing products
To maintain
competitive edge in
Customer Complaint serving the customer
Service churning, management,
defection scoring Customer satisfaction
Sales support
Division(Used Trade-in promotion,
Clustering, RFC,
cars, Auto card, Loyalty program
other activities)
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14. 7.0. Challenges addressed by MS Dynamics CRM 4.0 at Maruti Suzuki
Create and maintain the platform for reporting & dash-board creation as a Business
Intelligence initiative to leverage data of over 6 million customers.
Data migration from DMS (Oracle 9i platform to) Microsoft Dynamics CRM 4.0 platform,
the two different technologies migrated successfully for the strategic purpose of Maruti
Suzuki.
Customer level data-mining for enhanced decision making of stake-holders such as Brand
managers, Network development team and used car divisions etc.
Advanced Analytics: Predictive Models for Up-Sell, Cross-Sell and other business
problems.
Monitoring of data of the company in terms of sourcing, sufficiency & quality .
It has catered the needs of brand managers for effective campaigning and targeting the
right set of customers cost effectively.
8.0. The future challenges for Maruti Suzuki’s CRM
There is lot of service campaign budget over spending on huge set of customers. To
optimize the utilization of service budget using CRM analytics, so that only right set of
customers is targeted for campaigning. Hence, fully integrated CRM is the next big
challenge.
Holistic integration of CRM with SCM: A holistic integration of CRM systems with SCM
systems in preliminary value-add activities represents further evolution in an OEM’s CRM
activities.. Car design controlled by demand profiles provides better capacity planning and
thereby can help reduce fixed costs. As a result, OEMs considerably improve their
variability. To operationalize these strategies, an OEM first needs to have an overview of
all internal CRM strategies. OEMs that have already centralized their CRM need to
develop an extensive strategy that incorporates customer-specific national and regional
CRM solutions. It is anticipated that only concepts that combine realistic goals with
positive economic results will succeed.
Helping the dealer better Sales forecasting: currently Maruti dealers are forecasting based
on tactical measures. The CRM can be extended to integrate with DMS, there by better
accuracy of forecasting of vehicles and thus less inventory costing, in turn, helps increase
dealers profitability.
Maruti launched e-commerce portal for used cars trade in recently & integrating the CRM
with the e- commerce portal for better insights for the used car business.
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