WHAT IS CRM?• The approach of identifying, establishing, maintaining, and enhancinglasting relationships with customers.”• CRM “is a business strategy that aims to understand, anticipate andmanage the needs of an organisation’s current and potentialcustomers”.(know,target,sell,service)• CRM is a shift from traditional marketing as it focuses on the retentionof customers in addition to the acquisition of new customers
3CUSTOMER RELATİONSHİPMANAGEMENT (CRM)Traditional Marketing CRMGoal: Expand customer base, increasemarket share by mass marketingGoal: Establish a profitable, long-term,one-to-one relationship with customers;understanding their needs, preferences,expectationsProduct oriented view Customer oriented viewMass marketing / mass production Mass customization, one-to-one marketingTransactional relationship Relational approach
DEFINITION OF CRM“CRM is concerned with the creation, development andenhancement of individualised customer relationshipswith carefully targeted customers and customer groupsresulting in maximizing their total customer life-timevalue”
THE PURPOSE OF CRM• “The focus [of CRM] is on creating value for the customerand the company over the longer term”• When customers value the customer service that theyreceive from suppliers, they are less likely to look toalternative suppliers for their needs• CRM enables organisations to gain ‘competitiveadvantage’ over competitors that supply similar productsor services
CONTINUED… Builds a database that describes the customers and therelationship they hold with the company. Database: a collection of information that is organized in a way thatallows it to be easily accessed, managed and updated. Provides enough detail so that the company can offer the client theproduct/service that matches their need the best. May contain information about their past purchases, who isinvolved with the account and a summary of all conversations.
HISTORY OF CRM…• Dawn of CRM- Emerged in 1980 and the earlier version was called DatabaseMarketing.• Rise of CRM- 1990’s saw great improvement in terms of CRM. Companies began tosee benefits of offering perks to the customers.• Fully Developed CRM- Latest version used in today’s organizations.
BENEFITS OF CRM• Companies Sales Soars High• Customer Knowledge• Customization• Excellent Customer Service
LIMITATIONS• Time Consuming Job• Costly to implement.• ERP is a must to get the best out of CRM.• Customer Satisfaction is subjective.• Requires Multi Factor Indicators.
WHY DID CRM DEVELOP?CRM developed for a number of reasons:• The 1980’s onwards saw rapid shifts in business thatchanged customer power.• Supply exceeded demands for most products• Sellers had little pricing power• The only protection available to suppliers of goods andservices was in their relationships with customers
WHY IS CRM IMPORTANT?• “Today’s businesses compete with multi-productofferings created and delivered by networks, alliancesand partnerships of many kinds. Both retainingcustomers and building relationships with other value-adding allies is critical to corporate performance”• “The adoption of C.R.M. is being fuelled by arecognition that long-term relationships withcustomers are one of the most important assets of anorganisation”
COMPONENTS OF CRM SYSTEMOperational CRMOperational CRM provides automated support to “front office” business process. Eachinteraction with customer is added to customer’s history and staff can retrieve information ofcustomers.Analytical CRMAnalytical CRM analysis data in an attempt to identify means to enhance a company’s relationshipwith clients.
CONTINUED….Collaborative CRMCollaborative CRM focuses on interaction with customers (personal interaction, letter, fax,phone,internet, e-mail, etc..).
WHAT DOES CRM INVOLVE?CRM involves the following :• Organisations must become customer focused• Organisations must be prepared to adapt so that it takecustomer needs into account and delivers them• Market research must be undertaken to assess customerneeds and satisfaction
“STRATEGICALLY SIGNIFICANT CUSTOMERS”• “Customer relationship management focuses onstrategically significant markets. Not all customersare equally important” .• Therefore, relationships should be built withcustomers that are likely to provide value forservices• Building relationships with customers that willprovide little value could result in a loss of time,staff and financial resources
MARKERS OF STRATEGICALLY SIGNIFICANTCUSTOMERS• Strategically significant customers need to satisfy at least one ofthree conditions :1. Customers with high life-time values i.e. customers that willrepeatedly use the service in the long-term2. Customers who serve as benchmarks for other customers3. Customers who inspire change in the supplier
INFORMATION TECHNOLOGY AND CRM• Technology plays a pivotal role in CRM .• Technological approaches involving the use of databases, datamining and one-to-one marketing can assist organisations to increasecustomer value and their own profitability.• This type of technology can be used to keep a record of customersnames and contact details in addition to their history of buyingproducts or using services.• This information can be used to target customers in a personalisedway and offer them services to meet their specific needs.• This personalised communication provides value for the customer andincreases customers loyalty to the provider.
FACE-TO-FACE CRM• CRM can also be carried out in face-to-face interactions without theuse of technology.• Staff members often remember the names and favouriteservices/products of regular customers and use this information tocreate a personalised service for them.• For example, in a hospital library you will know the name of staff thatcome in often and probably remember the area that they work in.• However, face-to-face CRM could prove less useful whenorganisations have a large number of customers as it would be moredifficult to remember details about each of them.
CONTINUED…• maximisation of opportunities (eg. increased services, referrals,etc.)• increased access to a source of market and competitor information• highlighting poor operational processes• long term profitability and sustainability
TECHNICAL FUNCTIONALITY Scalability: CRM may be used on a large scale while also beingable to be reliably contracted/expanded to whatever scale isnecessary. So the data is flexible and won’t distort when adjusted. Multiple communication channels: the ability to interface with usersvia many different devices (phone, WAP, internet etc.) Basically,you can get what you want, when you want wherever you are.
MAIN POINTS TO TAKE HOME… Know your customer! CRM can lead to greater customer service → greater profitability!! Remember that it is not enough to be nice to your customer – youmust learn from them.