Introduction to CRM UNIT1 9/15/2011 1 Prof. Sunitha Ratnakaram
Emerging trends in marketing Innovative marketing styles Green Cause Buzz Mobile Network Sports Social media Paid search ads Permission Marketing 9/15/2011 2 Prof. Sunitha Ratnakaram
Emerging issues It’s not about product it’s about social behavior It’s not about a cheaper product or your idea. Try to change customer behavior. It’s not about better coffee – it’s about the place I am not looking for a ¼” drill bit – I need to make a hole It’s not about the sound – it’s about how it makes me feel It’s about my space It’s about my video It’s about my opinion It’s about the experience It’s about your choices, places, and time Examples Apple, Starbucks, MySpace, Harley-Davidson 9/15/2011 3 Prof. Sunitha Ratnakaram
Old paradigm Value creator 4P’s 9/15/2011 4 Prof. Sunitha Ratnakaram
New paradigm Customer Value creator Product Brand 4P’s 9/15/2011 5 Prof. Sunitha Ratnakaram
Relevance of WoM 9/15/2011 6 Prof. Sunitha Ratnakaram
Few Marketing Trends for 2011 Marketing Trend #1: Increased use of digital media and a decrease in television, radio, and print media. Marketing Trend #2: Increased use of quality, targeted content (textual and video) that tells a company's story well and engages the prospective customer. Marketing Trend #3: Increased use of e-mail to reach out to prospects and customers more frequently at a very low cost. 9/15/2011 7 Prof. Sunitha Ratnakaram
Continued….. Marketing Trend #4: Increased use of blogs, social networking, and other social media to create dialog and relationships with prospects and customers. Marketing Trend #5: Increased use of search engine marketing (SEM) techniques, such as pay-per-click and other trackable paid marketing techniques. Marketing Trend #6: Increased use of online webinars and decreased use of large trade shows. Marketing Trend #7: Increased use of outsourced marketing functions to experienced professionals 9/15/2011 8 Prof. Sunitha Ratnakaram
CRM Marketing initiatives Cross selling and up-selling Customer retention Behavior prediction Customer profitability and value modeling Channel optimization Personalization Event based marketing 9/15/2011 9 Prof. Sunitha Ratnakaram
Definition The automation of horizontally integrated business processes involving front office customer contact points (marketing, sales, service and support) via multiple, interconnected delivery channels. Metagroep The infrastructure that enables the description of and increase in customer value, and the correct means by which to motivate valuable customers to remain loyal – indeed, to buy again. 9/15/2011 10 Prof. Sunitha Ratnakaram
Few concepts The cost of acquiring customers From customer acquisition to customer loyalty …. To optimizing the customer experience 9/15/2011 11 Prof. Sunitha Ratnakaram
Few more PRM (Partner RM) SRM (Supplier Relationship Management) mCRM (mobile CRM) xCRM (other letters preceding CRM) 9/15/2011 12 Prof. Sunitha Ratnakaram
General properties of relationships, networks and interaction Collaboration – suppliers, customers, competitors and govt. agencies Longevity Commitment, dependency and importance Trust, risk and uncertainty Power Frequency, regularity and intensity Adaptation Attraction 9/15/2011 13 Prof. Sunitha Ratnakaram
Elements of CRM The four cornerstones of CRM Customer knowledge Relationship strategy Communication The individual value proposition 9/15/2011 14 Prof. Sunitha Ratnakaram
Customer knowledge Who is the customer? Customer profile What they purchased? How they want to be communicated? Current and correct data bases Objective is to help customer better, timely and with appropriate solutions 9/15/2011 15 Prof. Sunitha Ratnakaram
Relationship strategy Tell and listen more than you sell Have broader and deeper interest in the right customers Completion of transaction is not the end of relationship Trust and commitment must grow 9/15/2011 16 Prof. Sunitha Ratnakaram
Communication Each customer feels that their communication experience was basic with supplier Repetition of information Strict procedures which become obstacle in problem solving even for simple problems Generally conversations are not spontaneous Communication problem becomes obvious in multichannel communication system. E.g. A customer using mobile, internet, customer care and personal interaction for completing a transaction 9/15/2011 17 Prof. Sunitha Ratnakaram
The individual value proposition Know individual customer Develop a relationship with him/her Carry on dialogue Do not avoid individual proposition to each customer Firm may work on producing standard modules on large scale but assembling in flexible way Customized propositions increases complexity, as firm never likes to loose economies of scale But sometimes this may not give results E.g. A retailer’s complex route planning for delivery vans 9/15/2011 18 Prof. Sunitha Ratnakaram
How to make it effective? Grow in all aspects step by step All are equally important One should not move ahead of others Expected yield will not materialize This may make top mgt. feel contrary of CRM and they may withdrew from implementation 9/15/2011 19 Prof. Sunitha Ratnakaram
CRM Capabilities for sales, marketing and service CRM Capabilities for sales In personal selling process Prospecting Pre approach Approach Presentation Handling objections Closing Follow up In general selling Create customized solutions Create unique feel for the customer 9/15/2011 20 Prof. Sunitha Ratnakaram
CRM Capabilities for marketing Need recognition New product development Marketing communications Segmentation, Targeting and Positioning 9/15/2011 21 Prof. Sunitha Ratnakaram
CRM capabilities for services After sales services Customer grievance handling Training customers on new products & periodic monitoring 9/15/2011 22 Prof. Sunitha Ratnakaram
Satisfy customers, shareholders, and deliver a measurable ROI Customers Personalized solutions Effective grievance handling Services Improved service quality Reduction of customer stress Increased value for money Customer empowerment Share holders Increased EPS due to increase in customer loyalty, cross selling and up selling 9/15/2011 23 Prof. Sunitha Ratnakaram
Deliver a measurable ROI ROI could be tracked with customers and groups of customers to rework on relations if required Case of Royal Bank of Canada It’s CRM journey began 6 years ago CRM is no longer a program for them but “It is the core strategy” Goal is to make each relationship profitable Before CRM revenues were growing at 10% and profits 10 – 15% annually After implementation of CRM revenue growth touched 15%, and profit growth near 25% For them CRM is a journey Every new investment is subject to the company’s standard, capital allocation procedures Micro measurements like deposit rates, credit limits, direct mail response rates are closely watched Every new initiative is tested using a test group and control group before launching “Top of the house” metrics like revenue growth, profit growth, cost control etc. also are keenly focused on. If you are to succeed with CRM see it as strategy not as a tool. 9/15/2011 24 Prof. Sunitha Ratnakaram
Front and Back office Tasks in CRM systems Primary task – consists in supporting or performing the activities involved in customer contact processes E.g. exchange of information, placement of orders, invoicing, payment and provision of service etc. Secondary task – is related to facilitating the primary task E.g. providing customer information and management information A variety of sub systems work for the completion of the said tasks 9/15/2011 25 Prof. Sunitha Ratnakaram
Characteristics of front office and back office Front office Customer data must be easily retrieved and modified E.g. within seconds insight may be gained into who the person is on the other end of the telephone line Back office Which products customer has bought earlier Due to it’s difficulty a middleware also works to coordinate front office and back office. 9/15/2011 26 Prof. Sunitha Ratnakaram
Front office The sales force automation or the sales information system that supports sales person or account manager during face-to-face contact The partner management system which is geared towards providing support to intermediaries in the joint approach to the end user market The call or contact centre, where incoming and out going traffic by telephone, fax and the Internet takes place The website The kiosks (points of information) 9/15/2011 27 Prof. Sunitha Ratnakaram
Middleware The data warehouse or data mart, in which data originating from different sources are compiled to obtain a clear and better customer profile The campaign management system that produces the analysis, planning, execution and management of marketing communication campaigns The content management system which ensures that data from different sources may be published through different channels using a consistent design. 9/15/2011 28 Prof. Sunitha Ratnakaram
Back office This usually involves the legacy systems which are generally older and have a longer life span. These systems are designed for the management of transactions or products E.g. separate systems where different insurances like health, motor and life insurances are maintained by companies Here batch processing of large quantities of similar orders only is intended Not suitable for real time processing of a large quantity of varied small orders 9/15/2011 29 Prof. Sunitha Ratnakaram
CRM process 9/15/2011 Prof. Sunitha Ratnakaram 30 CRM process is defined as any group of action that is instrumental in the achievement of the output of an operating system, in accordance with a specified measure of effectiveness.
CRM process 9/15/2011 31 Prof. Sunitha Ratnakaram
Benefits 9/15/2011 Prof. Sunitha Ratnakaram 32 Ability to retain loyal and profitable customers and channels for rapid growth of the business project Acquiring the right customers, based on known characteristics, which drives growth and increased profit margins Increasing individual customer margins, while offering the right products at the right time.
Identify the goals of CRM 9/15/2011 Prof. Sunitha Ratnakaram 33 Increase in Customer Service Increasing Efficiency Aiding the Marketing Department Questions to ask while establishing CRM goals: What are your main goals/objectives? Who is your audience? What is the best way to achieve CRM goals? How will you accomplish your CRM goals? How will you measure success?
Benefits of identifying goals of CRM Establishing clear CRM goals is vital to any organization. After a clear view of this has been obtained going ahead with the CRM implementation will be infinitely easier and will result in reduced costs, efforts, time and no wastage of organization resources. Overall success is possible as the end objective is clearly defined and can be worked towards easily with employee cooperation. 9/15/2011 34 Prof. Sunitha Ratnakaram
Customer-centric business strategy and CRM process 9/15/2011 Prof. Sunitha Ratnakaram 35 CRM is a business strategy, so it’s more than a functional strategy. It affects organization as a whole Marketing IT Service Logistics Finance Production and development HRM etc.
Continued…. 9/15/2011 Prof. Sunitha Ratnakaram 36 The CRM strategy will have to provide direction to each department or employee that maintains contact with customers Customer-oriented approach of employees and managers should improve In practice, when it comes to CRM, many companies focus on increasing efficiency and reliability Self – service grants to customers like, tax filing, IRCTC, other travel and tourism bookings For these services to be more efficient perfect definition and control of all activities involved is required.
Continued ….. 9/15/2011 Prof. Sunitha Ratnakaram 37 Focusing only on operational excellence would not make CRM as a strategic approach Goal of CRM is the development of long-term, mutually profitable customer-supplier relationships, where customer is given central position CRM’s goal as business strategy is to increase ‘customer intimacy’