The document discusses the importance of customer orientation and customer relationship management (CRM) for business success. It states that customers are the only reason businesses operate and the only source of value. Effective CRM requires understanding customers, maintaining relationships, communication, and maximizing customer value. CRM involves collecting detailed customer data, analyzing it to develop relationship strategies, and communicating with customers through all touchpoints to increase loyalty over the long term.

1. CUSTOMER ORIENTATION
“ THE ONLY VALUE YOUR COMPANY WILL EVER
CREATE IS THE VALUE THAT COMES FROM THE
CUSTOMERS----THE ONE’S YOU HAVE NOW ,THE
ONES YOU WILL HAVE IN FUTURE.BUSINESSES
SUCCEED BY GETTING,KEEPING AND GROWING
CUSTOMERS.CUSTOMERS ARE THE ONLY REASON
YOU BUILD FACTORIES,HIRE EMPLOYEES,
SCHEDULE MEETINGS, LAY FIBER OPTIC CABLES or
ENGAGE IN ANY BUSINESS ACTIVITY.WITHOUT
CUSTOMER’s YOU DON’T HAVE A BUSINESS.” – Philip
Kotler

2. EVOLUTION
Customer
Marketing centric
Segment
Practice marketing
centric
Product marketing
centric
marketing
1960 1980’s 1990’s
Time

3. WHY CRM
• It is 5 times MORE costly to generate a new
Customer than Retaining a CUSTOMER
• To build a Long term Business by attracting ,
Maintaining and Growing customers

4. Traditional Modern Customer Centric
Organisation Chart Organisation Chart
Customer
Top
Frontline people
Mgmt.
ER
CU
Middle Mgmt.
Middle Mgmt.
OM
ST Top
OM
ST
Frontline people Mgmt.
CU
ER
Customer

5. Transaction vs. Relationship Marketing
TRANSACTION MARKETING RELATIONSHIP MARKETING
Focus on Single Sale Focus on Repeat Purchase or
reference
Orientation of Product Orientation of Product
features benefits
Little emphasis on cust.service Highest emphasis on customer
service
Moderate customer contact High customer contact
Short Time scale Long time scale
Quality is concept of Quality is for all
production

6. WHAT IS CRM
CRM is the process of carefully managing
detailed information about individual
customers and as a group and all “customer
Touch points “to maximum customer loyalty.

7. • CUSTOMER KNOWLEDGE
• RELATIONSHIP STRATEGY
• COMMUNICATION
• MAXIMIZE CUSTOMERS VALUE PROPOSITION

8. CUSTOMER’s PERCIEVED VALUE
• THE DIFFERENCE BETWEEN TOTAL BENEFITS
AND TOTAL COST
CPV = “What I Get” – “What I give”
TOTAL BENEFIT TOTAL COST
• PRODUCT BENEFIT • MONETARY COST
• SERVICE BENEFITS • TIME COST
• PERSONNEL BENEFITS • ENERGY COST
• IMAGE BENEFITS • PSYCHOLOGICAL COST

9. CUSTOMER’s LIFE TIME VALUE
• A PROFITABLE CUSTOMER IS A PERSON ,
HOUSEHOLD , BUSINESS BUYER, THAT
OVERTIME YIELDS A REVENUE STREAM THAT
EXCEEDS BY AN ACCEPTABLE AMOUNT THE
COMPANY’s COST STREAM FOR ATTRACTING ,
SELLING AND SERVICING THAT CUSTOMER

10. • ACTIVITY BASED ACCOUNTING (ABC) WHERE
A COMPANY CALCULATES ALL REVENUE
COMING FROM A CUSTOMER IN A
FORSEEABLE PERIOD MINUS TOTAL COST
INCURRED TO SERVICE THAT CUSTOMER FOR
THE SAME PERIOD.THIS IS THE METHOD OF
CLV.

11. PROFITABILITY OF CUSTOMERS
PLATINUM CUSTOMERS
GOLD CUSTOMERS
IRON CUSTOMERS
LEAD CUSTOMERS

12. CUSTOMER PYRAMID
65% TEAM BASED
5%
SINGLE
15% 15%
ACCOUNT
MANAGER
80 % 20% PERSONAL
SELLING, MASS
COMMUNICATIO
N,INTERMEDIARIE
NUMBER (%) SALES or Profit S
share (%)

13. HOW TO IMPLEMENT CRM
• PEOPLE
• COMMUNICATION
• SYSTEMS

14. Growth
Employee Turnover
Retention
QUALITY Employee Value Customer
INTERNAL Customer
satisfaction External Satisfactio
SERVICE
Loyalty
service n
Employee
Productivity Profitability
Source: Harvard Business Review,1994

15. PEOPLE SHOULD BE
> Open
> Empathetic
> Committed
> Genuine
> Competent
> Good Listeners

16. COMMUNICATION
INTERNAL COMMUNICATION:
FROM MANAGEMENT TO ALL EMPLOYEES
EXTERNAL COMMUNICATION:
WITH CUSTOMERS
COMMUNICATION MUST BE
OPEN
 MUTUALLY AGREED UPON
 SOLUTION ORIENTED
 POSITIVE
 AVOIDING BLAME GAME

17. SYSTEMS
• IT SPPORT SYSTEMS
• PERFORMANCE TRACKING SYSTEM
• REWARD SYSTEM FOR EMPLOYEES AND
CUSTOMERS
• TRAINING

18. CUSTOMER RELATIONSHIP
PROGRAMMES

20. APPLICATION OF IT in CRM
• DATA STORAGE
• DATA ANALYSIS
• DATA WAREHOUSING
• DATA MINING

21. IT has been extensively used in
• Market Segmentation and Selection
• Customer analysis
• Relationship analysis
• Customer profitability analysis