The document outlines customer relationship management (CRM) as a model for managing company interactions with customers, highlighting its evolution from the 1980s to the 2000s. It discusses determinants of CRM, stages of relationship building, functions, and benefits, ultimately emphasizing the importance of trust and value. A case study on Mercedes-Benz illustrates the challenges faced prior to CRM implementation and the solutions adopted to improve customer satisfaction and loyalty.

1. Customer Relationship Management
(CRM)
Compiled By:
Jas Singh Bhasin

2. • Introduction
• Timeline of CRM
• Determinants of CRM
• Stages of CRM
• Functions of CRM
• Managing Customer Relationship
• Benefits of CRM
• Case Study : Mercedes-Benz
Learning Objectives

3. What is Customer Relationship Management (CRM)?

4. • It is a model for managing a company’s interactions with current and
future customers. It involves using technology to organize, automate,
and synchronize sales, marketing, customer service and technical
support.
• It is a new business philosophy based on trust and value
• It provides selling organisations with the platform to obtain a
competitive advantage by embracing customer needs and building
value-driven long-term relationships.
Customer Relationship Management

5.  1980s: Database marketing emerges.
 1980s: Database helped larger organizations rather then
small who only got survey type info.
 1990s: CRM appears as a two-way communication device.
 1990s: CRM leads to programs such as frequent flyer miles
and bonus points on credit cards.
 2000s: Internet has helped expand from stagnant database
and allows off-site information storage.
 2000s: Used most frequently in financial services, high tech
corporations
Timeline of CRM

6. Determinants of CRM
Trust
• The willingness to rely on the ability, integrity, and motivation of
• one company to serve the needs of the other company as agreed
• upon implicitly and explicitly.
Value
• The ability of a selling organisation to satisfy the needs of the
• customer at a comparatively lower cost or higher benefit than
• that offered by competitors and measured in monetary,
• temporal, functional and psychological terms.

7. Determinants of CRM
In addition to trust and value, salespeople must:
• Understand customer needs and problems;
• Meet their commitments;
• Make sure that the customer is always told the truth (must be
honest);
• Have a passionate interest in establishing and retaining a
long-term relationship.

8. Stages of CRM
• The Pre-relationship Stage
The event that triggers a buyer to seek a new business partner.
• The Early Stage
Experience is accumulated between the buyer and seller although a great degree of uncertainty and
distance exists.
• The Development Stage
Increased levels of transactions lead to a higher degree of commitment and the distance is reduced
to a social exchange.
• The Long-term Stage
Characterised by the companies’ mutual importance to each other.
• The Final Stage
The interaction between the companies becomes institutionalized.

9. Direct functions (are the basic requirements of a company that are necessary to
survive in the competitive marketplace)
• Profit;
• Volume; and
• Safeguard
Indirect functions (are the actions necessary to convince the customer to
participate in various marketing activities).
• Innovation:
• Market; and
• Access.
Functions of CRM

10. Functions of CRM
Management Decision
Process
Customer sensitivity
•Diversity
•Information
•Differentiated
offering
Value Creation Process
Technology Delivery Process
•R&D
•Technology integration
•Efficiency
Product Delivery Process
•Concept to launch
•Manufacturing process
Customer Delivery Process
•Supply chain
•Distribution
•Infomediation (distribution
of information)
Value-based
Strategies
•Pricing
•Communication

11. 18.11
Managing Customer Relationships
The salesperson must be involved in the following activities in order to initiate, develop and
enhance the process that is aimed at building trust and commitment with the customer.

12. 18.12
Managing Customer Relationships
Initiating the relationship
• Engage in strategic prospecting and qualifying;
• Gather and study pre-call information;
• Identify buying influences;
• Plan the initial sales call;
• Demonstrate an understanding of the customer’s needs;
• Identify opportunities to build a relationship; and
• Illustrate the value of a relationship with the customer

13. 18.13
Managing Customer Relationships
Developing the relationship
• Select an appropriate offering;
• Customise the relationship;
• Link the solutions with the customer’s needs;
• Discuss customer concerns;
• Summarize the solution to confirm benefits; and
• Secure commitment.

14. Managing Customer Relationships
Enhancing the relationship
• Assess customer satisfaction;
• Take action to ensure satisfaction;
• Maintain open, two-way communication; and
• Work to add value and enhance mutual opportunities.

15. • Companies that create satisfied and loyal customers, have more repeat
business, lower customer-acquisition costs and stronger brand value
which results in better financial performance.
Benefits of CRM

16. 18.16
Benefits of CRM

17. Top CRM Players
Company Product name
1. Microsoft Microsoft Dynamics CRM 3.0
2. Sage Software SalesLogix CRM
3. SAP America Inc. SAP Business One CRM
4. Parature Inc. Parature
5. Entellium Entellium CRM
6. Pivotal corp. Pivotal CRM
7. Maximizer Software Maximizer Enterprise CRM
8. Netsuite Inc. NetSuite CRM+
9. Oncontact Software Oncontact V
10. ADAPT Software Applications ADAPT crm
11. Exact Software North America e-Synergy

18. Case Study : Mercedes’s CRM
Challenges faced by Mercedes before implementing CRM:
• Autonomous Dealers:
Mercedes-Benz was sold in the UK through a franchised network of some 138 dealerships. All dealers managed their own
relationships including customer research, data base management, acquisition and retention processes.
• Low Quality of Service:
Although the technical quality of the product was highly regarded, customers complained that the service that they received
was not of the same high standard. This translated into declining customer satisfaction and increased defection.
• Communication-Delivery Inconsistency:
Customers reported that there was an inconsistency between the communication that they received and the service that was
delivered.
• Inadequate Enquiry System:
Enquiries from the customer went directly to the dealerships and were handled through their internal processes. These were
sometimes inadequate.

19. Case Study : Mercedes’s CRM
• Uncoordinated communication received from dealerships:
Mercedes-Benz customers received communication from different dealerships that was not always coordinated. Such
communication may not match customer needs at a particular point in time in their purchase cycle and may result in
conflicting or duplicated messages.
• Isolated Database:
Each dealership operated its own database. The information in this database could be out of date, inaccurate and missing
important information.
• Salesperson’s Attitude:
Salespeople did not always appreciate that it was essential to record correct and complete customer information if
effective contact was going to be sustained.
• Inconsistent Customer Record:
Mercedes-Benz buyers are even harder to track than the average person. Because of their high incomes, lifestyles and
career paths, they tend to be promoted and transferred more often and have the means to buy new houses frequently.

20. Case Study : Mercedes’s CRM
Solutions adopted by Mercedes:
• Adopting New Distribution Model:
They re-organized the market into thirty five new, larger geographical areas and invited a number of existing dealerships to
enter into new retailer agreements. This entailed these dealerships taking over responsibility for the retail sales and service
of Mercedes in specific geographic territories or ‘market areas’ (MAs).
• Project Management Team was Established :
The project management team set about identifying the key CRM processes and determining how each process would be
implemented throughout the new retail structure.
• Benchmark Mercedes-Benz :
This research suggested that there were several areas where greater value could be delivered to the customer during both the
sales process as well as during the ownership experience.
• New Retail Agreements started working :
Under the new retail agreements entered into by the MAs, it gained closer control of the valuable Mercedes-Benz brand.

21. Case Study : Mercedes’s CRM
• Better Relationship between customer and salesperson :
Instead of a salesman owning a customer, each relationship was carefully managed centrally through the new CRM
marketing team set up within each MA.
Each communication channel was carefully integrated so that the customer received relevant messages by an appropriate
channel at various critical points during the ownership cycle.
• Measurement of Customer Satisfaction and Customer Loyalty:
One MA was chosen to test out processes and to confirm the benefits. These results could be broadcast through the dealer
network to encourage others.
• Introduction of Critical Customer Processes:
Prospect Management, Complaint Management, Feedback Management, etc.
• Result:
The MA could justify the significant expenditure on CRM systems and processes by the impressive financial returns as well
as improvements in critical customer measures.

22. THANK YOU!