Unit 1


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Unit 1

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