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  1. 1. CRM <ul><ul><ul><ul><ul><li>A Customer - Centric Organization </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>As A </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Socio -Technical System </li></ul></ul></ul></ul></ul>
  2. 2. <ul><ul><li>CRM is not a product or service </li></ul></ul><ul><ul><li>“ A strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them” </li></ul></ul><ul><ul><li>It provides an integrated view of a company’s customers to everyone in the organization. </li></ul></ul>Overview
  3. 3. <ul><ul><li>An overall business strategy that: </li></ul></ul><ul><ul><li> enables companies to effectively manage relationships with their customers. </li></ul></ul><ul><ul><li> which dictate re-designing of functional activities </li></ul></ul><ul><ul><li> which drive re-engineering of work processes </li></ul></ul><ul><ul><li> which require CRM technology to implement </li></ul></ul><ul><li>CRM is a &quot;chain reaction&quot; </li></ul>
  4. 4. Why is CRM Necessary? Gather & access information about customers' buying histories, preferences, complaints, and other data so they can better anticipate what customers will want. The goal is to instill greater customer loyalty CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. Identifying the most profitable customers (Pareto’ s Principle 80:20)
  5. 6. CRM at the forefront - Reasons Global competition  & products harder to differentiate, Product-centric view to a customer-centric view Technology has ripened to the point where it's possible to put customer information from all over the enterprise into a single system
  6. 8. Types of CRM /Areas of Application Traditional CRM -transaction level data about individuals and products-sales force automation, marketing automation and call center systems Operational CRM -tracking customer activity-analytics - strategic planning support tool Collaborative CRM -provides a point of interaction between customers; staff and business partners, through a portal eCRM - online components of CRM
  7. 9. Market Movement The Indian CRM Market - Rs. 50-100 Crores CRM Market - segmented Services segment CRM Services Market > Market for CRM Software Indian Market for CRM Software and Services would grow to about Rs. 100 Crore by 2002 Software Services Training Consultancy Integration Out-Sourced CRM Services
  8. 10. CRM Market Segments
  9. 11. Global CRM Market
  10. 12. Forecast by Vertical Industry <ul><li>communications/telecom </li></ul><ul><li>financial services/ banking/insurance </li></ul><ul><li>discrete manufacturing/technology </li></ul><ul><li>retail/consumer goods and services </li></ul><ul><li>81% of the total market opportunity for CRM services </li></ul>
  11. 13. Trends in the Market
  12. 14. Elements of Integrated Customer Management
  13. 15. Benefits <ul><li>Customer Advocacy </li></ul><ul><li>Loyal customers = Profitability  @  cost </li></ul><ul><li>continual revenue stream </li></ul><ul><li>opportunities for cross sell and up sell </li></ul><ul><li>a rich source of referrals </li></ul><ul><li>A customer-centric organization ensures that customers have a consistent, satisfying, and personalized experience </li></ul>
  14. 16. ROI <ul><li>Bottom Line -biz has to sell more and service that demand without increasing the resources to do so </li></ul><ul><li>increase revenues or reduce costs </li></ul><ul><li>Top-line growth </li></ul><ul><li>3 sources only </li></ul>Better Customer Management Targeted Selling Efforts Focused Customer Retention
  15. 17. Case Study - Innovative Company <ul><li>$100 million in annual profits and 1 million customers </li></ul><ul><li>Baseline plans -grow customer base by 5% in the next year (with a 15%  in customer growth and a 10% reduction due to customer attrition) </li></ul><ul><li>Performing well </li></ul><ul><li>Average profits are $100 per customer </li></ul><ul><li>what steps they should take to improve overall profitability?? </li></ul>
  16. 18. Detailed customer profitability for each of its 1 million customers <ul><li>segmented their customers into 10 profitability buckets </li></ul><ul><li>Top 1% of customers - highest profitability </li></ul><ul><li>Bottom segment - 10% of customers with the worst profitability results </li></ul><ul><li>profitability ranges from an average $1,150 in the top segment to an average $300 loss in the their bottom segment. </li></ul>
  17. 20. 3 initiatives to improve overall profitability <ul><li>Better Customer Management </li></ul><ul><li>Targeted Selling Efforts </li></ul><ul><li>Focused Retention Efforts </li></ul>
  18. 21. Better Customer Management <ul><li>Grow the top customers’ profits by only 3% </li></ul><ul><li>The next 4 groupings of customers by 5% </li></ul><ul><li>Decreases the losses on the less attractive customers by 10% </li></ul><ul><li>Courses of Action </li></ul><ul><li>Use more of existing products </li></ul><ul><li>Increase fees, stop waiving fees or discounting revenues </li></ul><ul><li>Migrate customers to less costly distribution channels </li></ul><ul><li>Cut excess capacity and channel costs </li></ul>
  19. 22. Average profits  by 11% or $11 per customer
  20. 23. Targeted Selling Efforts <ul><li>Increase customer base by 15% or 150,000 customers </li></ul><ul><li>If IC can acquire a few more profitable customers and a somewhat fewer customers with an unprofitable profile??? </li></ul><ul><li>Without targeted selling - 150,000 customers with an average profitability of $125 =worth $15 million </li></ul><ul><li>With targeted selling - 150,000 customers with an average profitability of $263 = worth more than $39 million </li></ul><ul><li>Diff of more than $24 million & a 163%  over the status quo scenario </li></ul>
  21. 25. Focused Retention Efforts <ul><li>Attrition - IC loses 10% of their customer base every year due to customers moving out of the service area, customer satisfaction issues and other reasons </li></ul><ul><li>100,000 customers = $10 million in customer profits </li></ul><ul><li>If they can lose fewer of their more valuable customers and more of their less valuable customers?? </li></ul>
  22. 26. Realize a $500,000  in profits
  23. 27. The Bottom Line <ul><li>Grow by 5% because the customer base grew by 5% and their distribution of customer profitability remains unchanged </li></ul><ul><li>Vs </li></ul><ul><li>Customer base by 5% but has the potential to grow total profits by 10 times. </li></ul><ul><li>Even if IC can only achieve 50% of this goal - five-fold increase </li></ul>
  24. 28. C ustomer Satisfaction R evenue Growth M anaging Costs
  25. 29. CASE SHOPPERS’ STOP’S “FIRST CITIZEN CLUB” <ul><li>Launched in 1994 (shoppers’ stop opened its first store in 1991) 4000 + FCC members in 1994 </li></ul><ul><li>Three Tier system </li></ul><ul><li>Classic-Rs.2500 p.a/Silver-Rs.10000pa/Gold-Rs.40000p.a </li></ul><ul><li>100000 FCC members in 2000 </li></ul><ul><li>Gold:2% , Silver:25% , Classic:73% </li></ul><ul><li>15% of the walk-ins on any day are FCC members </li></ul><ul><li>40% – 60% of sales come from FCC members </li></ul><ul><li>FCC Programme integrated into in-store </li></ul><ul><li>ERP package Merchandise Management </li></ul>
  26. 30. Progress happens not when questions are answered But when answers are questions !