Crm unit v (crm application)

Relationship Officer:ABN AMRO Slide No : 02 ERP Functional Consultant
Customer Relationship Management Operational Issues in Implementing CRM
IILM Graduate School of Management

Course Contents
• CRM in B2C Market (Business to Consumer)
• CRM in B2B Market (Business to Business)
• Impact of Service Quality on Loyalty
• Case Study- Implementing a CRM Solution at Ritu Kumar
Customer Relationship Management CRM Applications
TELECOM
AIRLINES
HOSPITALITY

CRM in TELECOM
• Fundamental idea in any CRM programme is to retain customers and
increase their lifetime value by building loyalty.
• Customer purchases the services of a telecom firm only for a particular time
period and he/she can easily defect to the competitor. In such case, the
strategy of the telecom provider is to provide a very good service that proves
to be a differentiating factor and motivates the customer to repurchase the
service or upgrade the service.
• First task is to provide quality service to customer.
• The call rates tend to vary with time and also occasions.
• A telecom firm can provide quality service by making sure that it uses
appropriate technology to cater to peak loads and also allow customer calls to
be routed through other paths in case of busy lines.
• Channel noise and other irritants such as cross talk need to be reduced.

CRM in TELECOM
• A customer might be a very high volume user and might also call at the peak
times. For such customers who are very high users, lowering a call rates after
they have made a specified numbers of calls might be a good idea.
• Successful telecom service providers always manage their churn rates
effectively. The churn rate is the percentage of old customers who defect to
rivals.
• All telecom firms have call centers to provide information to customers.
• They have loyalty program wherein old and heavy users are rewarded with
differential prices ,free airtime or other incentives such as free handsets, etc.
• One way to prevent defections is to identify good customers who are likely
to defect using data mining methods and prevent them from doing so by
giving them better offers.

CRM in AIRLINES
• An Airline is a very high capital-intensive industry that requires huge initial
investments.
• Airlines face prolonged customer contact over the period of journey of the
passenger. Huge competitions in this industry has made airlines look at
cultivating long-term relationships with their customers. They use various
strategies to attract & retain customers. Some of them are:
– Airlines resort to differential pricing to distinguish their economy
class passengers from business class travellers.
– Frequent flyer programmes have been introduced.
– Sometimes, flight schedules of airlines might be disrupted. Take
responsibilty for such disruptions and provide hotel, transport…
– Airlines offer differential pricing based on the time of purchase of
tickets.
– Some categories of passengers such as students, senior, citizens,
disabled also get significant travel concessions.

CRM in AIRLINES
• Service philosophy in airlines requires them (employees) to maintain a
smiling face while dealing all problems like, a passenger might suddenly
fall ill while on plane, Baggage misplacements, flight delay etc.
• In coming years, CRM will increasingly play an important role in
determining the performance of airlines.

CRM in HOSPITALITY
• Hospitality industry includes hotels and restaurants of various types, vacation
resorts. Right from the time the customer makes contact with hotel either
through phone or through an agent to book rooms, arrival at the hotel,
occupancy of the rooms and finally check-out, there is a continuous
interaction between customer and employee of the hotel.
• The idea of CRM is to retain customers and make them visit regularly.
• Customers tend to be primarily of two kinds, corporate who visit on official
purposes and guests on personal visits.
• Employees are a very important resource in hospitality industry.
• Employee morale, welfare and training directly affect the quality of the
services.

CRM in HOSPITALITY
Many innovative CRM programmes have been implemented in the
hospitality industry. These are :
– Frequent usage programmes rewards customers for using
services of the firm.
– Another scheme is ’membership programmes’ where regular
customers are encouraged to join an exclusive club which offers
benefits such as discounts on services, free stay for children, a
choice of hotels at different locations for holidays etc
– Hotels keep in touch with their customers through frequent
newsletters and publications and may also offer sightseeing and
advisory services.
– The aim of all these efforts is to earn the good will and loyalty of
their customers.
– Hospitality is one industry where referrals play a very important
role. Repeating customers are very profitable for the hotel.

Understanding Business/Industrial market
Buying and selling of goods and services not only takes
place between a consumer and a firm but also between two
firms or businesses. A firm may buy raw material from the
other firm or business to process it further or it may buy
finished goods or even services to sell them to the
consumers under its brand name.
For example, Britannia Industries Limited buys flour
from many flour mills to make biscuits, which are finally sold in the
consumer.

Definition Business Market
“Business/Industrial market comprises of all the
organizations that buy goods and services for use in the
production of other products and services that are sold,
rented or supplied to others. It also includes wholesale
firms that acquire end goods for purpose of reselling at a
profit. In a business buying process, business buyers
determine which products and services their organizations
need to purchase and then find, evaluate and choose among
alternatives suppliers and brands”.

Characteristics that makes Business Market unique
• Market structure and demand (In a consumer market, there are
usually many buyers, i.e. individuals or households. However, these
buyers buy in less quantity. But a business market contains a few but
large buyers who buy in bulk)
• Nature of the buying unit (key players involved include technical
experts, management and business market experts and finally well-trained sales
persons.)
• Types of decisions and decision process (more complex decisions)
• Major types of buying situations (straight re-buy, modified re-
buy, new task situation, systems buying )
• Participants in Business-buying process
• The Business Buying process

Participants in Business-buying process
• Users – help in defining the product specifications according to their
requirements.
• Influencers – members having technical capabilities to help define
specifications and provide information for evaluating alternatives.
• Buyers- they have formal authority to select the suppliers and negotiate with
them.
• Deciders – they have formal or informal power to select or approve final
suppliers.
• Gatekeepers – they control the flow of information about the
products/services being purchased.

CRM in B2B : Business Buying Process
Business buying process is much more complex than consumer buying process.
It usually consists of eight stages and take quite a bit of time before a decision is finally
made. The different stages are:
1. Problem/Need recognition
2. General need description – general characteristics & quantity of required item
3. Product specification – specifies best technical product characteristics for item
4. Supplier search – try to find best vendors.
5. Proposal solicitation – buyer invites qualified suppliers to submit proposal
6. Supplier selection – buyer reviews the proposals and select a supplier (s)
7. Order-routine specification – buyer decides & specifies the details of order
(Quantity, expected time of delivery, warranties, return policies etc)
8. Performance review – final stage where the buyer rates his/her satisfactions
with suppliers and decides whether to continue, modify or drop them.

Importance of CRM in B2B
• Business marketers often have to face complex decision making processes in
order to satisfy their customers. These involves close interaction with the
customers, long selling cycles, different sets of decision-makers and
influencers.
• Today business customers demand greater responsiveness, reliability and
quality consciousness from their vendors.
• Today it is not uncommon to see vendors and their customers go in for
contracts for products and services that last as long as ten to twenty years.

Importance of CRM in B2B
CRM strategies in B2B market :
1. Focusing on key customers and building strong relationship with them.
2. Key Account Management (KAM) is one of the most popular and
successful approaches used for customer retention and development.
3. Proactively generate high levels of satisfaction with every interaction.
4. Creating a value perception for the customer. The customer must see the
relationship with the vendor as something that brings value and adds to
their competitive advantage.

Relationship Officer:ABN AMRO Slide No : 20 ERP Functional ConsultantIILM Graduate School of Management

Ritu Kumar Bridal Collection
The name Ritu Kumar does not require any introduction among the fashion
buffs around the world. She is one of India’s leading and most gifted fashion
designers.
The desire to own a Ritu Kumar original creation is every bride’s dream.
Ritu has nurtured a unique and incomparable style of her own which
includes ancient Indian handicrafts work and she combines them with a
contemporary flair to create stunning outfits.
Fashion Designer: RituKumar
Ritu Kumar was born in Amritsar, Punjab on November 11, 1944 and graduated
from the Lady Irwin College, New Delhi in the year 1964, later on she went to
Briarcliff College, New York, United States of America in 1966 for higher studies.
In the late 60s Ritu Kumar began her venture with a couple of hand block printers
and two tablets in a small village near Kolkata.

Case study: RituKumar
Kindly go through the article “CASE STUDY-Implementing a CRM
Solution at Ritu Kumar”.
Discuss the following points during interactive session:
1. What are the driving force for implementing CRM at RituKumar ?
2. What are the objectives of CRM implementation at RituKumar ?
3. What are the benefits of implementing CRM at RituKumar ?
4. What are the criteria used for selecting product vendors of CRM at
RituKumar ?
5. What are the applications area of CRM at RituKumar ?
6. How RituKumar benefited after implementing CRM solution ?

Crm unit v (crm application)

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