Introduction, meaning, definition, History, purpose, internal marketing, Strategies, customer relationship management system, approaches, phases, Customer data, data analysis and application, privacy concerns, recency frequency monetary analysis, advantage's, disadvantages,

1. By Babu
Customer Relationship
Management

2. Introduction
• Transaction-based marketing - Buyer and seller
exchanges characterized by limited communications
and little or no ongoing relationship between the
parties
• Relationship Marketing - Development, growth,
and maintenance of long-term, cost-effective
relationships with individual customers, suppliers,
employees, and other partners for mutual benefit

3. What Is Customer
Relationship Management?
a company-wide business strategy designed to optimize
profitability, revenue, and customer satisfaction by
focusing on highly defined and precise customer
groups.
Customer Relationship Management (CRM) is…

4. Definitions
• “is a business strategy with outcomes
• that optimize profitability, revenue and
customer satisfaction
• by organizing around customer segments,
• fostering customer-satisfying behaviors and
• implementing customer-centric processes.”
• “is a strategy
• used to learn more about customers' needs
and behaviors
• in order to develop stronger relationships
with them.”

5. Buyer-Seller Interactions from Conflict
to Integration

6. History of CRM
B&S CIMS CRMRM
B&S – Buying & Selling
RM – Relationship Marketing
CIMS – Customer Information Management Systems
CRM – Customer Relationship Management
e-CRM- A subset of CRM that focuses on enabling customer
interactions via e-channels (The web, email and wireless,
online marketing and feed back )
Time line
e-CRM
Late 80’s Mid 90’s 2018 - FutureEarly 90’s

7. Purpose of CRM
• Why we need CRM
• Defining CRM
• Identifying different customer types
• Developing customers i.e. Loyalty programs
• A buzz phrase…with meaning
• Good CRM has a sophisticated database
• Management of customers –
don’t have to be passive recipients of their
behavior

8. • Platinum Heavy, reliable users, not price-
sensitive, try new products, loyal
• Gold Large users who push for price breaks,
shop around and not so loyal
• Iron Low volume or intermittent users; cost
to serve them is quite high
• Lead Demanding, want special attention but
don’t buy much and show no loyalty

9. 9
External customers - People or
organizations that buy or use a firm’s
goods or services
Internal customers - Employees or
departments within the organization
whose success depends on the work
of other employees or departments

10. Customer Relationship
Management Strategy
Link all processes of the company from its customers
through its suppliers
Foster customer-satisfying behaviors
Encourage and track customer interaction with the company
Organize the company around customer segments
Allows companies to tightly focus in on their target markets

11. Identify customer relationships
Store and integrate
customer data using IT
Capture customer data
based on interactions
Identify best customers
Understand interactions
with current customer base
Leverage customer
information

13. Interactions of the
Current Customer Base
Touch Points
All possible areas of a business
where the customers communicate
with that business.
Point-of-Sale
Interactions
Communications between
customers and organizations that
occur at the point of sale, normally
in a store

14. Three phases of CRM
• Acquiring New Relationships
• You acquire new customers by promoting your
company’s product and service leadership.
• Enhancing Existing Relationships
• You enhance the relationship by encouraging
excellence in cross-selling and up-selling,
thereby deepening and broadening the
relationship.
• Retaining Customer Relationships
• Retention focuses on service adaptability –
delivering not what the market wants but what
customers want.

15. Store and Integrate
Customer Data
Database
Compiled listResponse list
Data Warehouse
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16. Data Analysis
Predictive modeling
Lifetime value analysis
Recency-frequency-monetary analysis
Customer segmentation

17. Campaign management
Retain loyal
customers
Cross-selling other
products and services
Designing targeted
marketing communications
Reinforcing customer
purchase decisions
Inducing product trial
by new customers
Increasing effectiveness
of distribution channel
marketing
Improving
customer service
Common CRM Marketing Database
Applications

18. Designing Targeted
Marketing Communications
Infrequent
Users
Moderate
Users
Heavy
Users
Offer direct incentives, such
as a price discount
Offer more reinforcement of
past purchase decisions
Design around loyalty and
reinforcement of purchase

19. Reinforcing Customer
Purchase Decisions
• Thanking customers for purchases and telling them
they’re important
• Updating customers periodically on order status
• Offer customer service opportunities with postsale
e-mails

20. Inducing Product Trial
• Use of marketing database to identify new
customers
• Best customer profile can be used to profile potential
customers
• Overlay demographic and behavioral data on
existing customer data

21. Increasing Effectiveness of
Distribution Channel Marketing
• Use Web sites to keep in touch with customers and
gain information about them
• Use multichannel marketing to monitor purchases
of customer shopping both in-store and online
• Use RFID technology to improve distribution

22. Privacy Concerns and CRM
• If customers fell their privacy is being violated, then
the relationship can become a liability.
• Privacy policies for companies in the U.S. are largely
voluntary, but may vary outside the U.S.

23. 1. Identifies customers most likely to
purchase again
2. Identifies and ranks “best customers”
3. Identifies most profitable customers
Recency-Frequency-
Monetary Analysis

24. Relationship Marketing
• Focuses on long term rather than short term
• Emphasizes retaining customers over making a sale
• Ranks customer service as a high priority
• Encourages frequent customer contact
• Fosters customer commitment with the
firm
• Bases customer interactions on cooperation and trust

25. • While company is quickly growing, customers are more
satisfied as well
• Service provided in a better way, and a quicker way
• Sales force automated
• Integrated customer information
• Certain processes eliminated
• Operation cost cut, and time efficient
• Brand names more quickly established
• A central database so that everyone in your company can
keep track of customer contacts
• Sales and marketing teams can benefit from having all
this inside knowledge about customers
• Lets you set up rules for distributing work throughout
your company
• Lets you pick and choose the functionality that you want

26. -Organizational wise change of priority to
customers.
- Significant investment of time and money
- Threatens management’s control/power
struggle
- Heightens people’s resistance to change
- Inappropriate integration leads to disaster