Is a philosophy or theory of the way of doing
business by building relationships – Internally
Relationship with three primary Stakeholders –
Shareholders, Employees and Customers.
It is about understanding the relationship
framework in totality (why, what and how) in
order to define the organizational goals and
EVOLUTION OF RM
1960s – Direct Mail
1970s – Direct Response Marketing /
Late ’70s – Direct Marketing
1980s – Database Marketing
Late ’80s – One-to-one Marketing
1990s – Loyalty Marketing
Late ’90s – Relationship Marketing
Business Strategy: Involves all the resources of the
organization aimed at enhancing relationship with
stakeholders of the company
Two-way Relationship: Mutual benefit to all the
Pragmatic: Factual and practical. Relies on
One-2-one: Customised to suit individuals. No ‘onefits-all’ strategy.
Dynamic: Need for details and scope for constant
TYPES OF CUSTOMER RELATIONSHIPS
connection between the entities. Understanding
the length, depth and width of relationships. A
long-term relationship. Ex: FMCG Buying, Bank
Tactical Relationship: Based on mutual
transaction. A short-term relationship. Starting
point for a strategic relationship.
Ex: Insurance, Travel and Tourism, Healthcare,
FUNDAMENTAL CONCEPTS OF CRM
Customer Satisfaction: Delivering products to
match / exceed customer expectations.
Providing higher value through enhanced
Customer Retention: Activity that retains
profitable customers. Mutually beneficial.
Loyalty is the ultimate point of retention.
Customer Loyalty: Continued buying. An
element of emotional attachment. Satisfied
customers become loyal over a period of time.
PLANNING RM STRATEGIES
Identify key areas of relationship (why)
Fix realistic objectives (what)
Plan the relationship route (how)
Resources: The Feasibilities
Medium: The Channel
Communication: The Message
BASIC RM STRATEGIES
Allocation of Resources
STP based on information available
Providing need-specific products
Effective reach - Media
The Retention Road-map: Suspect – Prospect Buyer – Customer – Loyal Customer – Advocate
The Strategies: “Activity – Status – Next Steps” Analysis.
CRM is the strategic use of
Information, Processes, Technology and
People to manage the customer’s
relationship with the company’s various
operations, viz., marketing, sales,
services and support, across the
customer life cycle.
Customer Life Cycle (CLC): CLC is the total time that
the customer is engaged with the company derived from
the customer’s experience and viewpoint.
Customer Asset: Customers as company’s assets. Loyal
customers earn long-tern revenues.
Customer Value: Differentiating valuable customers
from the rest. High-value customers generate higher
revenues at lesser costs.
Customer Touch Points: TPs are the means / media that
is used to interact with the customers. TP interactions
must be targeted to a specific customer and allow for a
response through a conversation / transaction / reply /
CRM is a total discipline.
CRM is a strategic tool.
CRM reaps long term benefits.
CRM is an enterprise plan.
CRM works on a set of processes.
CRM links to all operations that touch
THE CRM HIERARCHY
The Customer Actualization Paradigm
COMPONENTS OF CRM
Information – The raw material that is crucial
for a production process to take place.
Technology – The Machine that enables the
process of manufacturing – quickly and
Process – All the critical processes that enable
People – The power to convert raw material
into finished product.
Customer Loyalty – The finished product.
Managing information is critical for success of
Crucial for forecasting and strategic decision making
Customer information is a tangible asset that is
inventoried and managed
Obtained from various sources – Internal and
Scattered and crude, refined with the help of
The tools (Hardware, Software and Networks)
employed to manage the information and process
that is used to deliver customer experiences.
Technology is an initiator. Helps in designing the
CRM process based on information and objectives.
engineers the solution.
implementing and managing the CRM process.
Technology Decisions: The Platform, Partners and
A set of tools / steps / scheme of activities for doing
Based on objectives
Custom designed to suit the organizational
Defines the path / route from beginning to end
Critical component of CRM
Nearest to the customers
Satisfied customers come from satisfied people
Need to be trained on the CRM processes – the tools
Measurements and rewards for people retention.
Types of CRM Projects
Operational CRM: Integrating business processes
Collaborative CRM: Involves facilitation of
collaborative partners / services for building
relationship with customers.
Analytical CRM: Involves use of analytical tools and
technology to analyze the data that gets converted
Generic CRM Framework
GENERIC CRM FRAMEWORK
IDENTIFYING THE ISSUE / NEED
DETERMINING THE OBJECTIVE / PURPOSE
o To improve efficiency
o To increase effectiveness
RECRUITMENT AND SELECTION
TRAINING & DEVELOPMENT
MOTIVATION, EVALUATION &
Identifying IT requirements
Modifying the CTPs
Evaluating the CTPs
EVALUATING ACTUAL AGAINST PLANNED
METRICS FOR MEASURING CRM PERFORMANCE
o CSI: CUSTOMER SATISFACTION INDEX
Understanding the legacy data systems
Integrating the customer data across the
operational and functional channels
Evaluating the customer data
Purpose / Objectives
Improve Marketing Productivity: Increase marketing
management, reducing acquisition costs and through
retaining customer; enhance marketing effectiveness
through segmenting, targeting and positioning,
personalizing and customizing, partnering to enter new
markets and develop new products.
Enhance Mutual Benefits: Personalize the offerings,
anticipate and serve the emerging needs of the customers,
Carving a niche and enjoying the advantage of
committed, satisfy the expectations, listening to
customers, fine tune service processes, partnering and
building customer loyalty.
Programs – Based on Purpose
B2C Markets: After-marketing in the form of after sales
relationship building efforts; Loyalty Programs in the
form of special treatments given to privileged
customers; and cross selling
B2B Markets: Special sourcing arrangements, preferred
customer programs, JIT arrangements.
Programs – Based on Purpose
One-to-one Marketing / Individual Marketing or
Account based Marketing
Markets: Permission marketing via direct
marketing methods, and personalization
B2B Markets: Key account Management, Global
account management programs.
Programs – Based on Purpose
Partnering / Co-marketing
B2C Markets: Affinity Partnering for mutual benefits
using endorsement strategies or co-branding, by
creating a new brand to target a new segment.
B2B Markets: Co-designing, strategic partnership and
co-marketing for improved efficiency and mutual
CRM Planning - People
Identifying the right employees
Team structure – the number of members in a team
and the number of teams per project needs to be
management also needs to be decided.
Decisions regarding role specification with respect to
who plays what role in CRM management.
Training employees on building effective customer
interactions, handling complaints, motivating
them through right incentives and planning a
provision for all these
Monitoring process performance will safeguard
against failure and give roadmap for further
CRM Planning - IT
Identifying the IT requirements: IT requirements in
the form of software, hardware, network, technology
enable d CTPs
Understanding IT based CTPs like internet, mobile,
Modifying CTPs for improved performance, by
enabling efficient technology systems
Evaluating the CTPs using metrics
CRM Planning- Data
Understanding the legacy data systems, that are there
within the organisation.
Integrating the data across the functional and
operational channels to get a 360 degree view of the
Evaluating the data to identify the requirements for
CRM – Performance Evaluation
Defining metrics for performance evaluation – the
balanced scorecard method.
To evaluate if programs adhere to expectations
To take corrective actions in terms of modifying
existing processes or to develop new processes
Building a relationship model and developing a
performance metric confirming the objectives set.