2. CRM - as a business strategy
▪ CRM IS MORE THAN A FUNCTIONAL STRATEGY, IT IS RATHER A BUSINESS
STRATEGY. IT AFFECTS THE ORGANISATION AS A WHOLE AFFECTING-
Marketing, IT, logistics, finance, HR , management, etc.
✓ CRM strategy will have to provide direction to all the departments or employee
that maintains contact with the customers. Processes have tto become well
defined and will have to be executed flawlessly and efficiently.
✓ The question is whether or not a CRM strategy is suitable for every company
and whether or not there is an unequivocal CRM strategy to be defined.
✓ In practice, CRM involves companies formulating policies so as to increase EE’s
efficiency and effectiveness.
✓ It must be realised that it is the strategy of CRM and technology that is a
determining factor during the design of the CRM programme.
3. ELEMENTS OF CRM
The four cornerstones of the CRM are:
Customer knowledge
Relationship strategy
Communication
The Individual Value Proposition
4. CUSTOMER KNOWLEDGE
▪ Knowledge of the customer is the most essential element. It is rather the
beginning to the life long mutually profitable relationships. Not only knowledge
about the customer but the knowledge of the prospects is also important for the
company.
▪ What the customer has purchased, when, how, what mode of payment,
feedbacks, review given by customers, review of service, all together will fill our
database about one single customer.
▪ Where the business expands, the database expands demanding a more
systematic approach to every aspect.
▪ Companies are expected to develop the compentency and capability to develop
this type of individual customer knowledge for a large number of customers.
Databases have to be filled with correct and current data.
▪ Data must be summarised wisely as irrelevant data will lead to fulfilling
companies long term goals
5. RELATIONSHIP STRATEGY
▪ The main focus of all the business activities is to develop a long
term relationship with the customer/ customer-supplier
relationship.
▪ Rather than following a marketing strategy, one must follow ideals
of relationship strategy, taking help of the social psychology
parameters. Effort must hence be made to measure success with
customer satisfaction.
▪ The ideology of “Tell and Listen” to be followed rather than only
focussing on completed transactions , hence placing larger interest
in the liking of the customers.
▪ Their interest in individual customers does not end at the moment
the transactions is completed. Purchase is only the beginning of
the relationship.
6. COMMUNICATION
Dialogue and communication are the pillars on which a good long and stable
relationship is developed. So the companies need to devise a multichannel of
communication with the customers. Through which they can contact the
customers from ----------Anywhere and everywhere.
▪ Journey of interaction by a customer/prospect
▪ Phone Call Internet Browsing calls Face to Face
▪ Shifts have to be made between the various channels so as to proceed
smoothly. The conversation must take place smoothly, independent of time
and location.
7. INDIVIDUAL VALUE PROPOSITION
▪ WHAT DOES THIS MEAN?
▪ It means the products, services , price, features all adapted to the
individual circumstances and criteria.
▪ An organisation when get to know the customers, must develop
the bond in such a manner that the customers provide relevant
feedback and hence they can now formulate the new
products/services as per their wishes.
▪ However, in this an attempt is made to combine the large scale
aspect with flexibility. So the companies needs to be wiser to
balance both aspects.
8. Customer supplier relationship
▪ CRM stands for customer relationship management, or the relationship between
the customer and supplier. So before examining the strategic, technological and
organisational aspects of the CRM, one must discuss the nature of relationship
between customer and supplier
▪ What are the types of relationships per se?
➢ Primary
➢ Secondary
➢ Every relationship includes:
➢ - interactions
➢ - a certain degree of continuity
➢ - the effects of interaction
10. z
Types and Differences
Lacking/Weak Relation
1. Concrete agreements
2. Agreements have short term
horizon
3. Initiative of interaction only by
one party
4. A limited number of topics
5. Topics treated with limited depth
6. Both parties present to outside
world as separate
7. Each pursue their own interests
8. Intention regarding continuation
is limited
9. Few barriers to end relationship
10. They seek outside alternative
business partners.
Close/ Good Relation
1. Few agreements concerning
reciprocation
2. Long term horizon
3. Initiative by both parties
4. Multitude of topics
5. Topics treated with high degree
of depth
6. Both parties present as one
entity
7. Pursue personal interests and is
considerate to one another
8. Intention to continue
9. Many barriers to end the
relationship
10. They follow,( look but do not buy)
method.
12. Analysis of the relationship
The Exploratory phase- (initial 3 months)
▪ The customer sees the promises made during communication, level of expectation
during this is low, as they little to no experience with the products or services.
The Growth phase-( 3 to 2 years):
▪ Sharp rise in the number of purchases, customers get to know of your products,
satisfaction increases, the supplier is now examined more for its performance than
for its reputation or image.
The Saturation phase- (more than 2 years):
▪ Highest number of purchases, highest degree of commitment, not many changes
in behaviour pattern, goodwill is built up, appeal of relationship improves.
The Decline Phase- (as soon as the number of transactions drop down)
▪ Deterioration of the relationship, reduction in the need of the products, economy
buyers start switching. WHEN THIS STAGE CAN OCCUR? ANY TIME AFTER ANY
STAGE
