Introduction to customer relationship management

1. Prateek Jain
CRM- An Introduction
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3. History of CRM
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• 1960 :
– ERA OF MASS MARKETING
• 1970 :
– SEGMENTATION AND CUSTOMISATION

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5. 1980 :
NICHE MARKETING AND SFA
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6. 1990 :
RELATIONSHIP MARKETING, TELEMARKETING AND
CALL CENTERS
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7. Monopoly Market
• Single Seller
• Seller’s Market
• No Close Substitutes
• Barriers to Entry
• Firm and Industry are the same
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8. Bits and bytes
• CRM – the hottest buzz word in businesstoday
• Developing a personal and a professional profile about each
customer
– Basic and historical information
– Personal preferences
– Trends and habits
– Demographical information
• Building a CRM culture
• The power of integration
• Using emerging technology to get closer to the customer
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9. Current facts… A Reality Check
• Today customers are in charge – they make the rules
• Putting technology at the center stage
• Business intelligence is one of the most growing segment in the
marketplace
• Customer loyalty is very difficult to maintain due to competition
• Customers want an excellent service and they want to feel special
• Most companies think they are customer-focused however in reality they
are product-centric
• There is a need to formulate customer-focused firms which needs:
– CRM strategy
– Organizational change
– Corporate culture
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10. Economics of customer retention
“Winning back a lost customer can cost up to 50-100 times as much as keeping a
current one satisfied.”
Rob Yanker, Partner, McKinsey & Company
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Understanding your customer is key to retention…..

11. Why CRM?
• It costs 6 times more to sell to a new customer than to sellto
an existing one
• A typically dissatisfied customer will tell 8 to 10 people about
his/her experience (mainly related to poor customerservice)
• The odds of selling to a new customer is 15% versus 50% to
an existing customer
• 70% of the customers complaining will do businessagain
with the company if the complaints are quickly addressed
• 90% of existing companies do not have integrated CRM tools
and platforms
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12. Customer Relationships Today
Product
Pricing
Community
Distribution
Communication
Branding
Customer
Relationships
Building a customer-centric
approach to Internet
marketing by focusing on
customers
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13. CRM Basics
• CRM is the timely delivery of excellent service
“customer relationship management”
• CRM is a combination of business process and
technology that seeks to understand a
company’s customers from a number of
perspectives including:
– Who they are?
– What they do?
– What do they like?
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14. Age of the never-satisfied customer…
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• CRM becomes a support tool in a time characterizedby:
– Increased competition
– Globalization
– Growing cost of customer acquisition
– High customer turnover
• CRM is all about creating a better value propositionto
customers
• Information and communication technology is now acting asa
catalyst for CRM
– Extended enterprise
– World wide web and the Internet

15. Defining CRM
• CRM is an integrated sales, marketing and service strategy
that is based on a timely and accurate information
infrastructure and that depends on coordinatedenterprise-
wide activities
– Example: tracking customers interactions with the firm
– Customer tracking includes steps in the sellingand
customer service cycles
• CRM steps include
– Targeting
– Acquisition
– Retention
– Expansion
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16. Defining CRM
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• Targeting
– Who do we target?
– What segments are most profitable?
– What segments match our value proposition?
– What is the best segmentation strategy forus/our
industry?
• Acquisition
– What is the best channel for each segment?
– What is the acquisition cost for a channel/segment?
– Do certain channels deliver certain types of customers?
– Cost effective acquisition?

17. Defining CRM
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• Retention
– How can we improve retention?
– What is our average customer relationship length?
– How can we hold customer for as long as possible?
– What is the most cost effective method of retention?
• Expansion
– How many products does our average customerbuy?
– How can we induce our current base to buy more products?
– Who are the prime targets for expansion?
– What is the cost of expansion?

18. Goals of CRM
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• Using existing relationship to grow revenue
• Using integrated information for excellent
service
• Introducing consistent, replicable channel
processes and procedures

19. CRM…
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• CRM is a business strategy and not a product
• Putting CRM into practice requires developing a set
of integrated applications to address all aspects
related to the front-office needs
• CRM could be a major support platform for small and
medium-sized enterprises
• Cost of the information and communication
technology applications and infrastructure should be
calculated as opposed to the return-on-investment

20. CUSTOMER RELATIONSHIP MANAGEMENT
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• CRM enables an organization to:
– Provide better customer service
– Make call centers more efficient
– Cross sell products more effectively
– Help sales staff close deals faster
– Simplify marketing and sales processes
– Discover new customers
– Increase customer revenues
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21. THE BENEFITS OF CRM
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• Firms can find their most valuable customers by using the
RFM formula: recency, frequency, and monetary value
• Organizations MUST track:
– How recently a customer purchased items
– How frequently a customer purchased items
– The monetary value of each customer purchase

22. EVOLUTION OF CRM
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• There are three phases in the evolution of CRM:
– Reporting
– Analyzing
– Predicting
• CRM Reporting Technologies help organizations identify their
customers across other applications
• CRM Analysis Technologies help organizations segment their
customers into categories such as best and worst customers
• CRM Predicting Technologies help organizations predict
customer behavior, such as which customers are at risk of
leaving

23. The Evolution of CRM
• Three phases in the evolution of CRM include
reporting, analyzing, and predicting
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24. The Evolution of CRM
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25. CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS
• CRM success factors include:
1. Clearly communicate the CRM strategy.
2. Define information needs and flows.
3. Build an integrated view of the customer.
4. Implement in iterations.
5. Scalability for organizational growth.
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26. THANK - YOU
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