Crm 1


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This is a presentation based on customer relationship management, which is now-a-days a very important issue for every company as well for the customers. For capturing more and more customers satisfyingly, every firm need to get into this CRM.

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Crm 1

  3. 3. How Can Key customers be ‘managed’? <ul><li>KCRM is the most significant development in marketing. It helps to define marketing newly. </li></ul><ul><li>KCRM enables the marketing, sales & service functions to be integrated, clarifying company priorities, resources planned & cost-effective. </li></ul><ul><li>Customer-driven business management should be embraced by all functions at all levels. </li></ul><ul><li>The full implications of CRM could mean a dramatic shift in organization & changes in the business. </li></ul>
  4. 4. New Emphasis On KCRM <ul><li>Need for relationship is being generated by customers rather than suppliers. Pressures for partnership arise because of- </li></ul><ul><li>The Glut Economy , where customized product is needed. </li></ul><ul><li>New technology opens up the opportunities for competitor,& the existing company needs partnership to survive. </li></ul><ul><li>Shorter Product Life Cycle leads the customers to get choosy. So, relationship is needed. </li></ul><ul><li>The quality revolution & need for just-in-time production . </li></ul><ul><li>Alliances, joint-ventures help to reduce risk, lower the cost &improve profitability. </li></ul><ul><li>As the channels of distribution is complex & fragmented. </li></ul>
  5. 5. Every Customer Is- A Market Segment <ul><li>As with each customer relationship is build up, so each customer becomes a single market segment. Every single potential customer is a market segment. </li></ul><ul><li>Marketing success depends upon the integration of three activities – </li></ul><ul><li>Identification, analysis and selection of market segment </li></ul><ul><li>Creation of relevant products and services according to the customer needs. </li></ul><ul><li>Sales activity focused on key customer within the targeted segments. </li></ul>
  6. 6. Continued.. <ul><li>The effective co-ordination of these activities is hampered because of – </li></ul><ul><li>Poor internal communication of marketing strategy arise when salespeople try to sell indiscriminately to any prospect. </li></ul><ul><li>Inadequate channels for the feedback of market intelligence by sales and customer service. </li></ul><ul><li>We must remember that the success of any supplier depends upon the careful selection and management of relationships with key customers. </li></ul>
  7. 7. How Does KCRM Affect The Sales Function? <ul><li>The job of customer manager differs from the sales manager in these aspects- </li></ul><ul><li>Prospecting - its about ideal customer profile, targeting specific/potential customer & mutual beneficial business in partnership with customers. </li></ul><ul><li>Product -KCRM helps to negotiate with customers for customized product to fit their need. </li></ul><ul><li>Organization -as a team-leader customer manager multi-level & multi function contacts between suppliers & customers organization. </li></ul><ul><li>Profile -KCRM gives the total understanding of how business works. </li></ul><ul><li>Style -change in the company are for maintaining the profitable customer relationships. </li></ul>
  8. 8. CONTINUED... <ul><li>Responsibility- the above duties of the customer manager is totally different. </li></ul><ul><li>Authority- customer managers have wide ranges of authority & financial information. </li></ul><ul><li>Culture- KCRM is a kind of PRO-ACTIVE in customer relationship, but the sales function is RE-ACTIVE. </li></ul><ul><li>Competition- where there is KCRM, there is difficulty to find substitute in the market. </li></ul><ul><li>Targets- profits & the long-term stakeholder value is the target . </li></ul>
  9. 9. The benefits of collaborative supplier- customer relationships <ul><li>Lower unit costs. </li></ul><ul><li>Lower production costs & enhance overall competitiveness. </li></ul><ul><li>Greater business stability by collaborative planning & commitment. </li></ul><ul><li>Selecting target customers, planned achievement of company goals is possible. </li></ul><ul><li>Image enhancement related to the status of the customer in the market. </li></ul><ul><li>Product development by Joint – funding. </li></ul><ul><li>Continuity & stability of supply. </li></ul><ul><li>Lower unit costs. </li></ul><ul><li>Better identification of both market & product opportunities. </li></ul><ul><li>Well defined ways of communication. </li></ul><ul><li>Development of personal relationships. </li></ul><ul><li>Image enhancement when supplier has highly positive attributes. </li></ul><ul><li>Joint – funding on R&D costs. </li></ul>supplier customer
  10. 10. What Are The Implications Of Human Resource? <ul><li>Key customer managers need skills in selling & negotiation, also to participate in the marketing plans of both supplier & customer company. </li></ul><ul><li>Some skill requirements are- </li></ul><ul><li>Understanding of how business works, both their own & customers’. </li></ul><ul><li>Ability to counsel, advice, & influence. </li></ul><ul><li>Ability to identify key result areas. </li></ul><ul><li>Ability to plan & allocate resources cost effectively. </li></ul><ul><li>Ability to negotiate effectively. </li></ul><ul><li>Ability to lead a team. </li></ul><ul><li>Understanding of interactive skills & international cultures. </li></ul>
  11. 11. Corporate Objectives & The Key Customer Manager <ul><li>As key customer managers carry an important and may be significant percentages of volume, revenue and profit, it is essential that the mangers will gather- </li></ul><ul><li>Market intelligence- what is going on, the trends in product & technology. </li></ul><ul><li>Customer knowledge- what is the key customers objectives & plans. </li></ul><ul><li>Creative ideas for new products and services . </li></ul><ul><li>Appreciation of the various recourse allocation. </li></ul>
  12. 12. Steps in the adoption and implementation of KCRM <ul><li>Understanding corporate objectives and poor competences </li></ul><ul><li>Generating business plans </li></ul><ul><li>Prioritize customer and prospect database </li></ul><ul><li>Agree development, maintenance and target strategies for key customers </li></ul><ul><li>Calculate and organize key customers workload resources </li></ul><ul><li>Get senior mgt commitment & motivate customer team members. </li></ul><ul><li>Prepare detailed individual key customer development plans. </li></ul><ul><li>Set up a key customer profitability measurement system. </li></ul><ul><li>Establish a key customer information system. </li></ul><ul><li>Establish a key customer satisfaction measurement system. </li></ul><ul><li>Collaboratively negotiate the business for mutual stability & gain . </li></ul>
  13. 13. The Pitfalls of KCRM <ul><li>The increased dependence on relatively few customers and there may be some vulnerable situation. </li></ul><ul><li>There may be possibility of pressure on profit margins. </li></ul><ul><li>The concentration on key customers may cause other customers to be insecure. </li></ul>
  14. 14. What will KCRM do for the company <ul><li>The prime purpose of KCRM is to respond to a customer-driven environment & to maximize the ROI. </li></ul><ul><li>In any business, financial performance depends ultimately on creating capturable customer value (CCV) as efficiently as possible. </li></ul><ul><li>On the next slide, there is a figure which illustrates the cascade of value within Dell Computers. </li></ul><ul><li>When customers buy a PC from Dell, they perceive a value in the benefits. </li></ul><ul><li>Value depends both on the product/service and on the customers’ needs. </li></ul><ul><li>PC’s are almost commodity product. </li></ul><ul><li>The more Dell can differentiate its products from competitors, the more CCV will be available to Dell. </li></ul>
  15. 15. KCRM Effort Is Dedicated To.... <ul><li>Develop new product business- offsetting high R&D costs it is beneficiary to be collaborating with specific customer </li></ul><ul><li>Increase added-value means to ensure that the product is designed to add more value to customer. </li></ul><ul><li>Gain market leadership- as it leads to the market share= volume=lowest unit cost. </li></ul><ul><li>To spread risk and reduce vulnerability- KCRM help in expanding the customer base. So that a supplier is not dependent on 1 or 2 customers. </li></ul><ul><li>To maintain existing business- KCRM helps to do this job efficiently. </li></ul><ul><li>To keep competition in check- tying up the key customers help to drive out the competitors. </li></ul><ul><li>To address operational problems- KCRM co-ordinates many functional departments like-pricing, distribution, customer service, technical support etc. </li></ul>
  16. 16. Is KCRM Right For Your Company? <ul><li>The KCRM concept can be applied to many companies, but a company must examine closely the drivers of CCV. The drivers are- </li></ul><ul><li>The distinctiveness of the value delivered- which is shaped by </li></ul><ul><li>---the depth of the customers knowledge. </li></ul><ul><li>---tailoribility of product/service. </li></ul><ul><li>The value of the problem solved - shaped by </li></ul><ul><li>--- frequency of purchase </li></ul><ul><li>---value of interaction </li></ul><ul><li>---complexity of the product </li></ul><ul><li>Based on these criteria, a table assessing the CCV in various markets is on the next slide-------- </li></ul>
  17. 17. Table: CCV drivers in various markets Fast-moving medium very high low very high = medium Consumer goods Investment very high low very high very high = high Banking Tax advice high medium very high very high = high Customized very high low very high high = medium Software Petrol very low very high very low medium = low Markets Tailoribility Frequency Complexity Value CCV
  18. 18. continued... <ul><li>KCRM is not applicable for every company. There are some situations in which KCRM is the best choice- </li></ul><ul><li>KCRM is more relevant to the business where- </li></ul><ul><li>few customers dominate market demand </li></ul><ul><li>significant economies of scale in production, distribution, promotion,& low unit costs. </li></ul><ul><li>product/service differentiation perceived by the customer. </li></ul><ul><li>complex decision making unit-where some decision makers are at headquarters, some at local office. </li></ul><ul><li>multifunction contacts </li></ul><ul><li>complex interactive product range-where different salespeople involved with same customer. </li></ul><ul><li>creative opportunities is there to tailor the products according to the customers need. </li></ul>
  19. 19. <ul><li>THANK YOU </li></ul>