The document provides information about customer relationship management (CRM). It begins with defining CRM as an approach to managing a company's interactions with current and future customers by analyzing customer data to improve business relationships and customer retention. It then discusses key CRM concepts like customer value, expectations, satisfaction, acquisition, retention, loyalty and lifetime value. Specific examples of how Amazon and Apple use CRM strategies like data collection, personalization and recommendations are also provided. The document aims to explain the evolution and importance of CRM for business growth and customer focus.
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Customer Relationship Management
1. P R E P A R E D A N D P R E S E N T E D
B Y : D R . H I M A N I R A V A L
Customer
Relationship
Management
2. Unit 1: Layout
Evolution of
customer
relationship
Definition
Emergence of CRM Practice
Factors responsible for CRM growth
CRM Process
Framework of CRM
Benefits of CRM
Types of CRM
Scope of CRM
Customer Profitability.
3. Meaning of CRM
CRM is an approach of managing a
company’s interaction with
current and future customers.
The CRM approach tries to analyse
the data about the customer’s
history with the company, in order
to
Improve business relationships
with the customers
Specifically focusing on
retaining the customers.
4. One important aspect of the CRM
approach is the systems of CRM
that compile information from a
range of different channels like;
Company’s website
Telephone
Email
Live chat
Marketing materials
Social media and more
Through the CRM and the
systems used to facilitate CRM,
businesses learn more about their
target audiences and how to best
cater to their needs and wants.
https://youtu.be/Yd3CNZL-o3Y
5. Definition
A management philosophy according to
which a company’s goals can be best
achieved through identification and
satisfaction of the customer’s stated and
unstated needs and wants.
CRM is a computerized system for
identifying, targeting and acquiring the
best mix of customers.
6. Apple CRM
Customer Relationship Management plays a pivotal role in Apple’s growth
strategy.
If you’ve ever used an Apple device, you probably had to register it using an
Apple ID. An Apple ID is an account you use to access Apple services like the
App Store, Apple Music, iCloud, iMessage, FaceTime, and more.
These unique IDs synchronize across devices, save music and film
preferences, and provide bespoke recommendations based on what you like.
For users, this is convenient. For Apple, it’s a tool that provides insights on
what customers like and it can be used for effortless, targeted marketing.
7. Amazon CRM
Throughout the past few years, Amazon has become the go-to online platform for
online shopping. One of the main reasons for this is Amazon’s CRM system. Amazon
has one of the most complete CRM infrastructures in the world that harnesses
customer data during purchases to instantly customize users’ online experience.
When purchasing an item from Amazon, you will need to set up a personal account.
Then, Amazon can track your purchases and browsing history to tailor marketing
campaigns and email campaigns based on things you will probably like.
Moreover, you can configure your account to set up purchases in one-click. This is
one of Amazon’s most popular feature and customers appreciate it as it dramatically
speeds up the checkout process when making a purchase.
8. Why CRM
developed?
The 1980s saw rapid shifts in business that
changed customer power.
Supply exceeded demands for most products.
Sellers had little pricing power
The only security available to suppliers was in
their relationships with customers.
CRM focuses on creating value for the
customers and also the company in the long
run.
When customers value the service that they
receive from the suppliers, they are less likely to
look towards alternatives.
CRM helps to gain competitive advantage over
their customers.
9. Features of CRM
Customer’s needs
Customer’s response
Customer satisfaction
Customer loyalty
Customer retention
Customer complaints
Customer service
https://www.youtube.com/watch?v=hnEQq7kNFWo
10. Types of CRM
Analytical CRM
• Designed to analyse
deeply the
customer’s
information and
data.
Collaborative CRM
• Deal with the
synchronization and
integration of
customer interaction
and other channels of
communications like
phone, emails, fax,
web etc.
Operational CRM
• It is focused on
automation,
improvement and
enhancement of
business processes
which are based on
customer facing or
customer supporting.
Geographic CRM
• Based on the geo-
location of the
customers. It
develops a
strengthened and
effective commercial
tracking strategy
with the ability to
record all the
information of your
current and potential
customers.
11. Scope of CRM
Analysis of customers data
Helps to track customer’s data
Grouping of customers
Useful to acquire new customers
Cost effective
Centralized system
Helps in building loyal customers
12. Role of CRM
In banking sector
In telecom industry
In service industry
In retail sector
14. Benefits of
CRM
Reduced costs, because the right things are being
done (ie., effective and efficient operation)
Increased customer satisfaction, because they are
getting exactly what they want (ie. meeting and
exceeding expectations)
Ensuring that the focus of the organization is
external
Growth in numbers of customers
Maximization of opportunities (e.g. increased
services, referrals etc.)
Increased access to a source of market and
competitor information.
Highlighting poor operational processes
Long term profitability and sustainability.
15. Limitations of CRM
Costs associated with CRM programs
Investment in people and technology
Evaluation of CRM programs is not possible
Ethical implications such as customer discrimination and privacy issues
Consumes a lot of time, money and effort
16. Customer profitability
Customer profitability (CP) is the profit the firm makes from serving a customer or
customer group over a specified period of time, specifically the difference between the
revenues earned from and the costs associated with the customer relationship in a
specified period.
According to Philip Kotler, "a profitable customer is a person, household or a company
that overtime, yields a revenue stream that exceeds by an acceptable amount the
company's cost stream of attracting, selling and servicing the customer."
Calculating customer profit is an important step in understanding which customer
relationships are better than the others.
Often, the firm will find that some customer relationships are unprofitable. The firm may
be better off (more profitable) without these customers.
At the other end, the firm will identify its most profitable customers and be in a position
to take steps to ensure the continuation of these most profitable relationships.
However, abandoning customers is a sensitive practice, and a business should always
consider the public relations consequences of such actions.
17. Case study: Examples of successful CRM
It will not be an exaggeration if we say that Amazon has a world class CRM
policy for over the span of 20 years now. They have millions of loyal customer
base and is the most trusted and preferred online shopping portal. This is
possible because of a well managed, efficient and properly framed CRM
policy.
Amazon is very well known and reputed for providing a variety of good quality
products to the customers all in one place. The best thing is that over the years
the company has managed to maintain its customer relation without any face
to face interaction with them.
The recommendations which are shown to the customer based on his previous
purchase helps the customer in choosing the product and makes shopping
easy, convenient and fun which is possible with a click of a button. Amazon
offers its customer an easy to use interface by storing all their details which
makes future purchase smoothly and quickly.
18. The reasons of successful CRM
The clever use of data makes the customer feel valued and special and is a
innovative way of attracting customers.
Amazon have there own in built software which is tailor-made to their
requirements. Their CRM is the reason behind all the useful features offered
by them.
Their software captures the details of each customer relating to their personal
data such as location, past purchases and accordingly customize a user’s on
site experience.
The CRM helps the customer to get the answers of their queries even before
the stage of human intervention comes. Customers have access to all
information related to the product ordered, delivery time and date, stage of
delivery, payment options, return policy etc. This certainly reduces the need
and cost of having customer service staff.
19. CRM USES BY AMAZON
COLLECTION OF DATA
PERSONAL DATA STORAGE
RECOMMENDATIONS
CUSTOMER SUPPORT
The question here in the case of Amazon is how can they keep their
number 1 position?
Secondly what more/differently can the firm do to maintain the market
share and also increase the market growth?
20. Activity
Customer Service Role Play Scenarios
The customer calls, emails, or messages your customer service team.
The customer asks a common service question.
The customer shares negative feedback about your product or brand.
The customer requests a product, feature, or service that you don't have.
The customer asks a question or has a problem that you don't have a solution for.
The customer purchases a faulty or incorrect product.
The customer needs to be transferred to another rep.
The customer wants to speak to a manager.
The customer is delighted with their brand experience.
The customer asks you to bend company policy.
23. Customer value
Value has many different meanings.
To some Value means price (what is the value of this car?) to others it
means benefit (the value I got from this car).
It also means the worth of something.
Customer value is the benefit that a customer gets for the price paid for
the product/service, expressed in monetary terms.
Calculation of customer value depends upon costs associated, quality,
services, price, demand and availability of product/service.
It is challenging for the organization to calculate customer value, as it is
a qualitative concept.
https://www.youtube.com/watch?v=A7AEc-B2PKQ
24. Customer value drivers/influencers
For example, from a customer's perspective, the value of a cup of coffee enjoyed
with a friend at a coffee shop might be greater than the value of a take-out cup
of coffee. While the monetary cost of the cup of coffee in both cases might be
the same, the value the customer extracts is different.
Price
Functional features
Positioning
Quality
Service
Customer relationship
Branding and marketing
25. Customer value management with CRM
Who are the best candidates for new products and services.
When are these customers most likely to buy.
What are the preferred buying patterns and influences of customers.
Improving customer value within the organization by use of CRM:
Helps to evaluate customer experience
Helps to collect customer data
Clarifying customer needs
Streamlining business processes
Focus on more than price
Target loyal customers
For. E.g. During a call with the customer service remove time as a measure of
quality and concentrate on getting your service right. Don’t ever make a
customer feel rushed.
26. Coca-Cola CRM
Coca-Cola uses CRM to promote collaboration and deal with
customer issues quickly and efficiently.
By using CRM software, every member of a Coca-Cola team
can identify issues, monitor customer behaviour and social
media to promote offers and promotions.
Moreover, team members can use mobile apps on the go to access
customer history anytime and anywhere, create and update work
orders, and send out field technicians in real-time.
27. Customer’s perceived value
Customer’s perceptions are the beliefs shaped by the consumers regarding a
product.
CPV is the value that a customer perceives about a product or a service based
on the expectations regarding its performance and all the costs of an offering.
CPV is what the customer expects to get and what he/she expects to pay
The marketing of a product or service involves attempting to influence and
increase its perceived value, which can emphasize qualities such as its
aesthetic design, accessibility, or convenience.
Customer perceived benefit - customer perceived cost = CPV
Lexus, for example, makes a luxury car that many consumers consider to be
top quality.
28. Customer expectations
Customer expectations relate to how a consumer anticipates the product to perform.
Expectations are crucial as actual results are compared with the expected
performance.
Customer expectations are shaped by:
Past performance
Word of mouth
Reviews
Competitors
Seller’s promise
When a young Ritz customer left his beloved Joshie the Giraffe toy at the hotel, all
his father could do was say that he had stayed on vacation a little longer. The father
Chris Hurn emailed the Ritz to explain the situation. They responded by not only
sending the beloved toy home, but by creating a photo booklet showing everything
Joshie had done during his extra stay.
If a hotel had done that for your child, would you stay anywhere else?
29. Customer satisfaction
Customer satisfaction is defined as a measurement that determines how
happy customers are with a company’s products, services, and capabilities.
Customer satisfaction information, including surveys and ratings, can help a
company determine how to best improve or changes its products and
services.
An organization’s main focus must be to satisfy its customers. This applies to
industrial firms, retail and wholesale businesses, government bodies, service
companies, nonprofit organizations, and every subgroup within an
organization.
Methods of measuring customer satisfaction
Survey mails, questionnaire method, customer reviews, tracking customers, pop up surveys,
etc.
31. Customer Acquisition
Customer acquisition is the process of acquiring new customers for
business or converting existing prospect into new customers.
A customer may be new to the organization or even he/she might be
new to a product category
Process of customer acquisition is more challenging and expensive as
compared to retaining an existing customer.
Methods of new customer acquisition
Advertising, Sales promotion, Public relations, personal selling, using social
media, Brand ambassadors, etc.
32. Customer retention
Some companies are only interested in acquiring new customers and pay
little to no attention to customer retention. But are you actually acquiring
customers if they are going to enter from the front door and leave from the
backdoor right away?
It is a set of strategies companies adopt to make sure their customers are still
interested in their products and services and will keep buying from them. So,
it’s basically an umbrella term that can include customer loyalty too.
While customer loyalty focuses on making fans out of customers, customer
retention is more interested in keeping them buying in effective ways. But the
end goal is obviously, customer loyalty and creating a community of loyal
customers.
33. Customer loyalty
It is the act of choosing one company’s products and services consistently
over their competitors.
Loyal customers choose you over competitors, even if they have a better offer
in the short-term, because of their past experience with your brand.
They don’t mind the changes in pricing or new features as long as it doesn’t
change how much enjoyment they get from receiving what you provide for
them!
A loyal customer is like a goldmine for your business. They keep
generating the revenue without you spending any money on acquiring new
customers, while also giving feedback to help improve the quality of your
product and service!
A bunch of these folks, combined together, form an important percentage of
any brand’s revenue and will be able to help to generate it through tough
times when there are no other potential buyers out there!
34. Strategies to retain customers
Deliver fast and
personalized
support
Invest in a good
employee
experience
Provide
omnichannel
support
Consistently
gather customer
feedback
Incentivize
loyalty
35. Customer retention benefits
Acquiring a new customer can be five to 25 times more expensive than
holding on to an existing one. – Harvard Business Review
You don’t need to spend big on marketing, advertising, or sales outreach. It is
easier to turn existing customers into repeating ones, since they already trust
your brand from previous purchases. New customers, however, often require
more convincing when it comes to that initial sale.
Cost savings: Customer retention is generally more cost-effective than
acquiring first-time customers
Positive word of mouth marketing: Loyal customers are more likely to tell
their friends and family about your brand
A better bottom line: Increasing retention rates by just 5 percent can increase
revenue by 25 percent to 95 percent.
36. Activision CRM
Activision is a pioneer in the video gaming industry that uses CRM to
connect with gamers via social media websites such as Facebook and
Twitter. By using a cloud-based CRM solution, the company was
able to:
reduce customer service related expenses by 25%,
assess and resolve 82 % of customer-related issues through online
self-service,
improve communications with its gaming community,
reduce overhead costs,
increase user satisfaction rates
37. Customer lifetime value
CLV is a measurement of how valuable a customer is to your company,
not just on a purchase-by-purchase basis but across the whole
relationship.
It’s an important metric as it costs less to keep existing customers than
it does to acquire new ones.
Historical CLV = T#1 + T#2 + T#3 + …..T#N ÷ Average Gross Margin
(Net sales – cost of goods sold)
Predictive CLV = T x AOV x AGM x ALT
(Transactions; Average order value, Average gross margin, Average
customer lifespan in months)
38. Customer experience management (CEM/CXM)
It is the collection of processes, a company uses to track, oversee and
organize every interaction between a customer and the organization
throughout the customer lifecycle.
CEM defines what a company looks like to the customer.
CEM is a strategy that puts customers at the center of marketing, sales and
customer support in order to drive brand loyalty and repeat business.
1. Understand the customer
2. Create a customer journey map
3. Develop an emotional connection
4. Capture customer feedback
https://www.youtube.com/watch?v=sG9PRsvfr5Q
39. Customer experience metrics
Also termed as customer experience measurement tools, used to
identify and fix gaps across the customer experience framework.
Customer Effort Score (CES): It helps to determine how much effort a
customer has to exert to get an issue resolved, a request fulfilled, a
product purchased/returned or a question answered. Customer churn
(who discontinue) is a key business driver and customer effort is a great
indicator of loyalty.
Customer satisfaction score (CSAT): It is used to determine the
satisfaction level of customers from usage of products/ services.
Net promoter score (NPS): It is used to measure the customer loyalty by
determining how likely they are to recommend the brand to others.
40. Difference between CRM and CEM
CRM is more about tracking customers, driving sales and resolving
issues. CEM, on the other hand, has a more holistic approach for
attracting and retaining customers by providing a great experience.
CRM deals with things that happen before a user has been acquired,
whereas CEM is about what happens once the user is on board.
CRM is like a business strategy for sustaining sales, marketing and
activities related to customer service; CEM is about knowing what a
customer wants, what motivates them to keep coming back to your app.
41. Tesco CRM
Like most retailers today, Tesco uses a Clubcard to reward its most loyal
customers. For every pound spent, you earn a point. These points can then be
traded in for Tesco Clubcard ‘vouchers’ and vouchers can then be traded in
for rewards. Tesco has partnerships with many restaurants, hotels and gas
stations thus giving users more opportunities to earn points.
There are programs available for all family members: Tesco Kids Club, Tesco
Baby and Toddler Club, Tesco Healthy Living Club, World of Wine Club.
Tesco uses this for targeted marketing actions and there are over four
million variations of its quarterly mailing to ensure that discounts and
offers are personalized for each customer.
42. Topics to debate
Speech analytics tools vs. market research department
CRM Approach: Offensive vs. Enduring customer experience
CRM: good data does not guarantee good decisions
Naughty or nice? CRM Approach justification
43.
44. Unit 3 layout: Planning for CRM
Steps in Planning CRM
Building Customer Centricity,
Setting CRM Objectives,
Defining Data Requirements,
Planning Desired Outputs,
Relevant issues while planning the Outputs,
Elements of CRM Plan,
CRM Strategy: The Strategy Development Process
45. Microsoft Dynamic 365
Microsoft Dynamic 365 is a highly collaborative cloud-based CRM
software that can help your sales team be more efficient in an increasingly
complex environment.
With Microsoft Dynamics 365, you will be able to analyze your company’s
performance to develop an effective marketing strategy and create
a personalized customer-business relationship. Moreover, this software can be
used to:
generate and send messages containing automatic responses based on the customer's actions,
customize workflows based on the requests and the needs of the company;
target customers before setting up an e-mailing campaign.
Microsoft Dynamics 365 now combines CRM (Microsoft Dynamics CRM)
and ERP. And, today this software offers a wide range of features
including marketing, customer service (after-sales service), field services (field
uses), project management automation, and more.
46.
47. Steps in planning CRM
Build a Project Team
Define your CRM Vision
Prioritize your CRM Goals
Map out your Processes
Consider Reporting Outputs
CRM Data Capture
Prepare your Data
Integrating CRM
Managing User Security
Identify the Risks
Create a User Adoption Plan
48. Building customer centricity
Customer-centricity means putting the customer first and at the center
of everything that you do.
It is about truly understanding the customer, so you can anticipate their
wants, needs and communication preferences, create meaningful
experiences, and build lasting relationships with them.
Customer-centricity challenge 1: Getting buy-in and building a culture
Customer-centricity challenge 2: Shifting from product-centric to
customer-centric
Customer-centricity challenge 3: Overcoming data limitations and
technology
https://www.youtube.com/watch?v=QwC0iR6FhZs
49. Strategies for building a customer centric culture
Prioritize customer empathy
Build a customer centric culture
Improve your data
Capture customer feedback
Reward employees
Think long term
50. Objectives of CRM
Improved Customer
Satisfaction
Improves The Efficiency
Of Your Business
Expand Your Customer
Base
Enhance Your Sales And
Support Teams
52. Defining data requirements
Data requirements definition establishes the process used to
identify, prioritize, precisely formulate, and validate the data
needed to achieve business objectives.
Create a Plan
Identify and Gather data Requirements
Review and Prioritize Requirements
Finalize Requirements
Manage Requirements
53. Crooked customer case
First off, there are some people who are just wrong for your business. They will
never be satisfied with any experience you provide for them and the customer
service you provide will simply become a venue for them to complain.
A classic example of this is a woman who flew Southwest airlines, yet
complained to the company every time she did. Her complaints were not about
a specific incident that went wrong or something that made sense to fix.
Instead, her comments ran the gamut, including annoyance about the way the
planes were boarded, a dislike of the fact that they didn’t have a first class
section, complaints about the uniforms employees wore, and more.
At long last, her history and comments were passed up to the company’s CEO,
Herb Kelleher. After one look, he immediately replied, “Dear Mrs. Crabapple,
We will miss you. Love, Herb.”
54. Moral of the story
If a person is a bad fit for your company, don’t make your contact center
agents do contortions to attempt to make them love you.
It’s all right (and even good) to recognize that not everyone is part of your
target audience. Focus on pleasing the people who will become your lifelong
advocates.
That’s where the real money and long-term loyalty will come from.
Wrong for Your Employees
“The customer is always right” sets a bad example for your contact center
employees. Why?
Because it implies that if employees disagree at all with something the
customer says (or can’t fix an issue), the employees are now the ones at fault.
55. Planning Desired Outputs
Don’t overpromise
Know your customers
Customer is not always right
Documentation
57. Elements of CRM Plan
Create a strategic plan
Change management
Power of customer information
Integration of technology
Continuous measurement &
improvement
https://www.youtube.com/watch?v=OheZ6WMva-0
58. CRM strategy development process
Set a destination
Prioritize the customers
Communicate with the employees
Introduce changes gradually
Track the customers
Sync everything to CRM
Employee involvement
Assess customers
Evaluate and improve
59. Relevant issues while planning the output
Challenges in CRM implementation
Cost
Set Clear Objectives
Deployment Type
Training
Plan out Integration Needs in Advance
Hire the Right CRM Solution Provider
https://www.youtube.com/watch?v=gEj9u0M8cLg