CRM
Process of carefully managing detailed information about individual customers and all
customer “touch points” to maximize customer loyalty.
- customer - current or potential buyer or user of the products of an individual or organization
types of customers
1) Resistant to change
2) Value for money
3) Customers who believe the company’s offer has better
value for money than competitors.
4) Customers who like the company and its offer and think
that the offer reflects their personal needs.
customer loyalty
Loyalty is the outcome of faith or
confidence in the company’s offer.
Value maximization considered as a good strategy which leads to customer loyalty.
Loyal customers ensure growth and
continued profits.
more profitable because:
- Willing to pay premium as they perceive that the offer holds a superior value.
- Loyal customers help in acquiring new business.
- CAC saving takes place.
- Loyal customer’s basket of products expands from the same source over a period of time.
three main strategies for loyalty development:
Customer Acquisition
Customer Retention
Strategic customer care
customer acquisition
Focus on transactions and product mix
Measures the number of new customers acquired over a period of time
Sales turnover is used as a measure
Profitability is assessed by the inventory of the unsold product mix and profit margins in sales transactions
customer retention
Loyalty is assessed through measurement tools like surveys and indices
Profitability is assessed on the basis of a product’s or brand’s share in the customer’s total purchases
strategic customer care
Integrate customer needs, aspirations and expectations in corporate processes
Make the organization more customer centric
Profitability is assessed on the basis of the share of the company’s brands in the customer’s total purchases
WHAT IS THE MATRIX ON SLIDE 12
customer value mgmt
Focuses on strengthening the dependency of the customer on the organisation
Technology gains importance
- Interactive voice responses, e-mail responses, call routing.
- Developing MIS to identify customers who are receptive to new offers and propositions of the
company
- Develop application tools geared to support functions like sales management, customer support, service quality, competition and customer intelligence.
Organisations using strategic customer care realise:
- Not all customers are the same
- Technology, efficient processes and empowered people are value drivers
- The organisation may not have resources but they do not want to lose customers.
CRM process
1) Creation and management of data mining and warehousing
- helps to disseminate information of customers to everyone in the organisation
- used to support sales and service staff
- pros: Targeted promotions, Product planning, customised services, relationship marketing, sales force, productivity, etc.
- costs: investment, operational, enhancement, workforce
2) Develop appropriate organisational structures
- Organisational Structure
- Development of inter functional processes ensuring customer problems are solved by all departments that have a role in it
- alliances need to be developed
between other companies and intermediaries e.g. call centres and they need to have motivation and commitment
3) Investment in technology
- Web- eyes, ears mouth of
CRM PROCESS - Warehouse- brain, nervous
system of CRM PROCESS - Workflow Management-
automate the procedure
4) People development
People
- Humans must have the right
knowledge, skills and a customer friendly attitude - Understanding of functions,
products, organization, desire to
be customer responsive - Responsiveness, reliability,
empathy, and assurance
measuring CRM
1) balanced scorecard
- grades a company’s performance from the perspective of customer satisfaction, operational excellence, and business innovation as well as financial success.
- helps to craft future strategies
2) catalytic measure
- focuses effort on identifiable changes to speed it up
- identify area needing change, create yardstick of performance, development measurement approach, communicate and implement program
Balanced score card
How well the financial objectives have been achieved?
Whether the shareholders are satisfied with the organization?
How well the customer perceives the organization ‘s offer
and do they feel satisfied and committed?
Organizational analysis with a view to identify the process
which is weak.
Is the organization is a learning organization and what has it
learnt over a period of time?
What are the knowledge management processes in the
organization?
attracting new customers
Companies spend huge amount of
effort, time and money
Methods used:
a.) Advertisements
b.) Direct mail
c.) Phone calls
d.) Trade shows
reducing defection - retention dynamics and the marketing funnel
marketing activities that build loyalty
1) interacting with customers - continuous feedback
2) loyalty programs - frequency programs (frequently in substantial amounts, e.g. Jet Airways Frequent Flier Program rewards customers with discounts and benefits. Retail clothing stores like Westside and H&M) or club marketing (open to everyone or limited to those paying a fee. open clubs good for database building and converting rival customers. Closed Clubs tend to attract long term loyalists, e.g. Souled Store, Harley Davidson)
3) personalised marketing - customers served by anyone, but clients only by assigned professionals. enourages conversion.
4) creating institutional ties -supply specialised equipment; switching inertia when large capital investment needed
drawbacks of database marketing
Requires a large investment in analytical programs , computer hardware.
Difficulty in getting everyone to be customer oriented
Resentment from customer on collecting personal data
Assumptions behind CRM may not always hold true
Harder to apply to packaged good providers than it is to B2B marketers and service providers - airlines, credit card, etc
