1

CUSTOMER RELATIONSHIP MANAGEMENT

– BECAUSE OUR BUSINESS IS ABOUT

GROWING TOGETHER

CASE STUDY: ICICI BANK

RETAIL MANAGEMENT

BY

AKANKSHA CHOUDHARY

088503

BMS III, 6TH SEMESTER

ST. FRANCIS DEGREE COLLEGE FOR WOMEN

2010-2011
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CHAPTER OF CONTENTS

1. Introduction
2. Customer relationship
3. Origin of customer relationship management (CRM)
4. Features of CRM
5. Perspectives of CRM
6. Customer relationship measurement
7. Types of CRM systems
8. Scope of CRM
9. CRM business cycle
10. Components of CRM
11. CRM software’s
12. CRM and marketing
13. Six market framework
14. Work flow of CRM
15. Process of CRM
16. Reasons for adopting CRM : The Business Drivers
17. Principles of CRM
18. Myths of CRM
19. Use of technology in CRM
20. CRM leaders
21. Benefits of CRM
22. Challenges in CRM
23. CRM issues
24. Case study: ICICI bank’s CRM initiatives
25. Conclusions
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INTRODUCTION
Customer relationship management (CRM) is a broadly recognized, widely-implemented strategy for
managing and nurturing a company’s interactions with customers, clients and sales prospects. It
involves using technology to organize, automate, and synchronize business processes—principally
sales activities, but also those for marketing, customer service, and technical support. The overall
goals are to find, attract, and win new clients, nurture and retain those the company already has, entice
former clients back into the fold, and reduce the costs of marketing and client service. Customer
relationship management denotes a company-wide business strategy embracing all client-facing
departments and even beyond. When an implementation is effective, people, processes, and
technology work in synergy to increase profitability, and reduce operational costs.

A company will store information that is related to their customers, and they will spend time
analyzing it so that it can be used for this purpose.
There are a number of reasons why CRM has become so important in the last 10 years. The
competition in the global market has become highly competitive, and it has become easier for
customers to switch companies if they are not happy with the service they receive. One of the primary
goals of CRM is to maintain clients. When it is used effectively, a company will be able to build a
relationship with their customers that can last a lifetime. Customer relationship management tools will
generally come in the form of software. Each software program may vary in the way it approaches
CRM. It is important to realize that CRM is more than just a technology.
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Customer relationship management could be better defined as being a methodology, an approach that
a company will use to achieve their goals. It should be directly connected to the philosophy of the
company. It must guide all of its policies, and it must be an important part of customer service and
marketing. If this is not done, the CRM system will become a failure. There are a number of things
the ideal CRM system should have. It should allow the company to find the factors that interest their
customers the most. A company must realize that it is impossible for them to succeed if they do not
cater to the desires and needs of their customers. Customer relationship management is a powerful
system that will allow them to do this.

It is also important for the CRM system to foster a philosophy that is oriented towards the customers.
While this may sound like common sense, there are a sizeable number of companies that have failed
to do it, and their businesses suffered as a result. With CRM, the customer is always right, and they
are the most important factor in the success of the company. It is also important for the company to
use measures that are dependent on their customers. This will greatly tip the odds of success in their
favor. While CRM should not be viewed as a technology, it is important to realize that there are end to
end processes that must be created so that customers can be properly served. In many cases, these
processes will use computers and software.

Customer support is directly connected to CRM. If a company fails to provide quality customer
support, they have also failed with their CRM system. When a customer makes complaints, they must
be handled quickly and efficiently. The company should also seek to make sure those mistakes are not
repeated. When sales are made, they should be tracked so that the company can analyze them from
various aspects. It is also important to understand the architecture of Customer relationship
management. The architecture of CRM can be broken down into three categories, and these are
collaborative, operational, and analytical. The collaborative aspect of CRM deals with communication
between companies and their clients.
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CUSTOMER RELATIONSHIP

In CRM the alphabet ‘R’ means relationship. But there is always an ambiguity to understand
the actual meaning of this relationship. This relationship between supplier and customer is
not a personal relationship or a one-time transaction relationship; for example buying a
refrigerator from a consumer’s outlet would not be called as a relationship

Relationship between any two parties is actually the interaction or transaction done between
the two over-times or consists of a continuous series of synergistic episode of interaction
many a times. This relationship only exists when the two parties diverge from a state of
autonomy to mutual or interdependent. Occasionally having a cup of tea from a café does not
mean that there is a relationship. If the customer returns to the café and orders the same tea
again because he likes the environment and taste or the method of making tea, more looks
like a relationship.

Relationship with customers can change from time to time because it is evolved under distinguished
situations. Following are the stages from where the relationship with customers can evolve:-

 Exploration- Exploration is the process when customer investigates or tests the supplier’s
capabilities and performance or cross verifies the product’s or brand’s usefulness. If the test
results fail to satisfy customer’s demands, the relationship can drastically come to an end.
 Awareness- Awareness is the process when the customer understands the motivational values
of supplier or the products he sells.
 Expansion- Expansion is the process when the supplier wins customer’s faith and customer
falls under huge interdependence of the supplier. This is time when there are more chances of
business with that particular customer and expand business.
 Commitment- Commitment is a powerful stage when suppliers learn to adapting business
rules and goal to excel.
 Dissolution- Dissolution is a stage when customer requirement suddenly changes and he
looks for better perspectives. This sudden change is the end of relationship

Relationship can come to an end due to many reasons like - customer is not satisfied with the services
of supplier or customer diverges to other better brands and products. Suppliers can also prefer to break
relationships due to customer failing to be a part to increase sales volume or when the suppliers are
entangled with fraud cases
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Broadly there can be two distinguished attributes of a developed relationship between supplier and
customer:-

1. Trust- Trust means confidence and security in any relationship and can be treated as the
biggest investment in building long term relationships. Trust is developed between the two
parties when they experience flawless and satisfied motives between each other. As a result of
knowing more about each other, all the doubts and risks are minimized and leads to inevitably
smooth business. Lack of trust on the other hand weakens the relationship foundation and
chances of uncertainty and conflicts increases.
2. Commitment- Commitment is yet another milestone that should be achieved to set a long
term mutual relationship. Commitment can only be attained when there is mutual trust and the
two parties share each other’s values. In a committed relationship both suppliers and
customers strive to uphold the relationship and never want to exit which in turn results in
building the relationship stronger and sharper. There is, in fact, huge cost which is incurred in
switching from committed relationships of one supplier and build new relationships with
other suppliers from scratch.

Relationship is always mutual or reciprocal so it is important for both supplier and customers to stick
to common guideline to attain better relationship among each other. There is lot of involvement of
cost, efforts and time in striving developed relationships between the two parties but the outcome is
always inevitable
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ORIGIN OF CRM

CRM originated in early 1970s when the business units had a manifestation that it would be advisable
to become ‘customer emphatic’ rather that ‘product emphatic’. Birth of CRM was because of this
heedful perceptiveness.

The famous writer and management consultant Peter Drucker wrote; ‘The true business of every
company is to make and keep customers’. Traditionally every transaction was on paper and dependent
on goodwill which created hindrance in clutching customers. People used to work hard in entertaining
customers by presenting new products with astonishing services; they were ready to work overtime
for grasping more and more customers for increasing business. This too resulted in customer
satisfaction and loyalty up to some extent, but at the end of the day there was no such bonding or
relation between the two to carry on with future business smoothly.

Previously business was quite easy as it was mere a one-to-one dealing without any specific process.
But with time, due to incoming complexities in communication, it found itself in troubled waters.
Emerging of new strategies and technologies in global marketplace and a mammoth degree of
competition in business, the approach needed to be changed to proactive rather than reactive.
Origination of CRM turned out to be a piece of cake for all suppliers and customers due to its
advantages. Customer relationship management came as a process that dealt with relationships with
customers surpassing the whole business.

Originally customer relationship management was based on three major principles; shielding the
current customers, fostering new customers and enhancing asset value of all the customers. With the
advent of CRM which was integrated with high end software and technology, business perspectives
were totally changed. A CRM system eventually emerged as consisting of company-full of
information which is depicted sophistically to increase business profit and meliorate customer
satisfaction and loyalty, on the same hand reduces business cost and investment.

The outgrowth in origin of CRM as a strategic approach is a result of some of the following important
perspectives:-

1. The belief that customers are the real assets and not just the people in the audience.
2. The maturation of one-to-one transaction advent.
3. Extensive use of software and technologies to maintain useful information and no manual
labour.
4. The realization of the benefits of utilizing information proactively and not reactively.
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5. The change of business view to relationship approach rather than transactional approach.
6. The approach of concentrating more on customer values rather than concentrating on how the
product is delivered to the customer.
7. The approach of focusing on customer satisfaction and loyalty rather than focusing self
satisfaction and profit.
8. The acceptance of the fact that using high end technologies and software the cost can
radically be decreased without compromising on quality and service of products.
9. The increasing tendency to retain existing customers and trying to get more and more
business out of them.
10. The realization that the traditional trends of marketing and selling are increasingly fading out
in the current economic scenario.

These additive approaches helped a lot in building up consequently the modern CRM. Today we have
well defined and sophisticated CRM systems into being which are always in process of improvement.
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FEATURES OF CRM

Customer Relationship Management is a strategy which is customized by an organization to manage

and administrate its customers and vendors in an efficient manner for achieving excellence in
business. It is primarily entangled with following features:

1. Customers Needs- An organization can never assume what actually a customer needs. Hence
it is extremely important to interview a customer about all the likes and dislikes so that the
actual needs can be ascertained and prioritized. Without modulating the actual needs it is
arduous to serve the customer effectively and maintain a long-term deal.
2. Customers Response- Customer response is the reaction by the organization to the queries
and activities of the customer. Dealing with these queries intelligently is very important as
small misunderstandings could convey unalike perceptions. Success totally depends on the
understanding and interpreting these queries and then working out to provide the best
solution. During this situation if the supplier wins to satisfy the customer by properly
answering to his queries, he succeeds in explicating a professional and emotional relationship
with him.
3. Customer Satisfaction- Customer satisfaction is the measure of how the needs and responses
are collaborated and delivered to excel customer expectation. In today’s competitive business
marketplace, customer satisfaction is an important performance exponent and basic
differentiator of business strategies. Hence, the more is customer satisfaction; more is the
business and the bonding with customer.
4. Customer Loyalty- Customer loyalty is the tendency of the customer to remain in business
with a particular supplier and buy the products regularly. This is usually seen when a
customer is very much satisfied by the supplier and re-visits the organization for business
deals, or when he is tended towards re-buying a particular product or brand over times by that
supplier. To continue the customer loyalty the most important aspect an organization should
focus on is customer satisfaction. Hence, customer loyalty is an influencing aspect of CRM
and is always crucial for business success.
5. Customer Retention- Customer retention is a strategic process to keep or retain the existing
customers and not letting them to diverge or defect to other suppliers or organization for
business. Usually a loyal customer is tended towards sticking to a particular brand or product
as far as his basic needs continue to be properly fulfilled. He does not opt for taking a risk in
going for a new product. More is the possibility to retain customers the more is the probability
of net growth of business.
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6. Customer Complaints- Always there exists a challenge for suppliers to deal with complaints
raised by customers. Normally raising a complaint indicates the act of dissatisfaction of the
customer. There can be several reasons for a customer to launch a complaint. A genuine
reason can also exist due to which the customer is dissatisfied but sometimes complaints are
launched due to some sort of misunderstanding in analyzing and interpreting the conditions of
the deal provided by the supplier regarding any product or service. Handling these complaints
to ultimate satisfaction of the customer is substantial for any organization and hence it is
essential for them to have predefined set of process in CRM to deal with these complaints and
efficiently resolve it in no time.
7. Customer Service- In an organization Customer Service is the process of delivering
information and services regarding all the products and brands. Customer satisfaction depends
on quality of service provided to him by the supplier. The organization has not only to
elaborate and clarify the details of the services to be provided to the customer but also to
abide with the conditions as well. If the quality and trend of service go beyond customer’s
expectation, the organization is supposed to have a good business with customers.

Let it be a newly brought up enterprise or a well established organization the above aspects prove to
be of prime importance in dealing with a genuine customer through a well organized CRM system.
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PERSPECTIVES OF CRM

The three perspectives are:-

 Information Technology (IT) perspective

 The Customer Life Cycle (CLC) perspective
 Business Strategy perspective

1. CRM from the Information Technology Perspective.

From the technology perspective, companies often buy into software that will help to achieve their
business goals. For many, CRM is far more than a new software package, the renaming of traditional
customer services, or an IT-based customer management system to support sales people. However, IT
is vital since it underpins CRM, and has the payoffs associated with modern technology, such as
speed, ease of use, power and memory, and so on.

2. CRM from the Customer Life Cycle (CLC) Perspective.

The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC).
However, CLC focuses upon the creation of and delivery of lifetime value to the customer i.e. looks at
the products of services that customers need throughout their lives. It is marketing orientated rather
than product orientated. Essentially, CLC is a summary of the key stages in a customer's relationship
with an organization.

3. CRM from the Business Strategy Perspective.

The Business Strategy perspective has most in common with many of the lessons and topics contained
on this website, and indeed within the field of marketing itself. The diagram below shows the
Marketing Teacher Model of CRM and Business Strategy. Our model contains three key phases -
customer acquisition, customer retention and customer extension, and three contextual factors -
marketing orientation, value creation and innovative IT.
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CUSTOMER RELATIONSHIP MEASUREMENT

Customers are the most important part of business. There cannot be any business without them. Only
satisfied customers will be interested in buying and they will also refer other customers to buy. By
measuring customer satisfaction a supplier can maintain a quality and long term relationship with
customers and secure their future business and financial assets. This measurement is essential for
suppliers to understand that their strategies are in right direction.

Market research or market survey is the tool that can be implemented to measure customer
relationship, customer satisfaction and customer loyalty. This tool is capable to furnish accurate
information on the following main facets of customer relationship:-

1) Loyalty
2) Satisfaction
3) Customer Behaviour
4) Response
5) Service
6) Customer Compensation
7) Customer Needs

This tool furnishes the above related information not only with accuracy but also with their future
aspects which is a very important asset for business perspectives.

By knowing the future perspectives of customers it becomes easy and efficacious for suppliers to
build a medium term or even long term relationships with customers. These future perspectives of
customers are related to following factors:

1. Present customer needs- By analyzing current needs of customers the suppliers can
determine the trend of buying of customers. How the present needs of customers can change
in past can also be predicted by these sophisticated research and analytical tools by deriving
some important trend variables of these customers.
2. Suppliers influence on products and services- How the suppliers are influencing the
customers by their products and services is an important factor for this research.
3. Competitors influence on products and services- Competitors are also the important factor
for analyzing future needs of customers. If competitors are making more prominent
impression of products and services then it is important for suppliers to mould their business
strategies to meet future needs of customers and to attract them to have business with them.
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4. Environmental or market effects- By predicting the current market trend suppliers can
analyze how the market is going to perform in the coming future. This research includes deep
analysis of the financial and economical conditions.

Market research is a strong tool that renders the customers with important and unique data on
customers’ needs which helps them to create business strategies and come up with considerable
business decisions. It helps the organization to encapsulate future business by determining business
goals and objectives to meet business targets. It also helps providing feedback regarding image and
performance of the organization so that they could leverage the strategies to meet the targets. It helps
them to be always on top.

Building relationship with customers in current market trends is the most important aspect that an
organization should focus on. Today distinction and eminence are the most sustainable approaches for
which developing good relationship with customers is essential. Hence incorporating techniques
which could measure the relations with customers are very important for all the organizations so that
they remain in this bonding forever. Every business unit uses different approaches according to the
business they posses to measure their relationship with customers. Also, these approaches of
measuring customer relationships are associated differently to different types of customers according
to their individual importance. By doing this the organizations are able to decide which area requires
application of resources to get best business impact.
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TYPES OF CRM SYSTEMS

I. STRATEGIC CRM:

The aim of strategic CRM is to concentrate and enhance the knowledge about customers and use this
knowledge to improve and customize the interactions with customers to maintain a long-term
relationship with them.

Determining and development of CRM strategies involves following steps:-

1. Amplify Commitment- Strategic CRM involves almost all the departments of an

organization e.g. finance, sales, manufacturing, distribution, marketing etc. Hence it is
essential to get support and use their important feedback while determining strategies. For this
each and every department should be kept informed about all the developments and
implementation of processes carried out or performed. Everyone should also be emphasized
about the positive approaches and end results of the strategies.
2. Building valuable project team- After organizational commitment is secured the next
important stage in developing CRM strategies is building a determined and valuable project
team. Each and every member of this team should be experiences and dedicated professional
as these members will be the key decision makers in the whole process. They will be
responsible to communicate all the related details and benefits of the CRM strategies to all the
members of the organization. These members should be from following work groups to
ensure all the aspects of strategies are addressed efficiently;
a. Management- Management professionals are responsible to provide motivation,
leadership and management at every strategic development step especially when a
change in business process or organizational structure is expected.
b. Technical- Automation of CRM strategies are important and must involve
experienced technical hands. Also technical professional provide their useful
contribution in building and managing software application and determining their
compatibility with existing software features.
c. Sales and Marketing- These are final users of CRM system once the strategies are
determined and implemented. The applied strategies are supposed to be successful
once these users fell comfortable and satisfied by using all the CRM features. Being
the end users these people are also responsible to provide useful feedbacks on
efficiency and effectiveness while the strategies are in development phase.
d. Financial- The CRM strategies must also be gone through or evaluated under
financial aspects. The financial professionals of the team can provide crucial analysis
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on assessment of enhanced productivity, evaluation of operational and production

cost and final estimated cost of the project. They also help in assessing the investment
cost per module or segment so that the product is delivered inside the budget.
e. External Experts- Many times some external consultants and other CRM vendors
are substantially helpful in strategy development. These are people who are generally
hired or outsourced for second fruitful opinion or if the organization is lacking with
sufficient CRM experts. These professionals have vast experience in the same field
and helps analyzing organization’s actual business needs, work with other
professional to review and approve complex business structure and even helps in
formulating the team members according to the expertise they posses.
3. Requirement Analysis- CRM strategies should always focus and concentrate on the actual
business requirements. This process involves a series surveys and questionnaires with top
level sales, marketing and financial managers to gather the actual expectations regarding the
strategies to be implemented and what results these strategies will throw in the final stage.
This is a very crucial factor in the development of an effective CRM system because if the
results are not matching the actual requirement or if they diverge from focus points, then that
means it’s not achieving the desired goals.

II. Operational CRM

Operational CRM is mainly focused on automation, improvement and enhancement of business

processes which are based on customer-facing or customer supporting. The main importance of a
CRM system lies on how the selling, marketing and service oriented processes are automated, and for
which operational CRM systems are embedded with following major automation applications:

1. Marketing automation- As the name implies, marketing automation is basically focused on

automating marketing processes. In marketing, campaign management involves marketers to
use customer specific information to determine, evaluate and develop communications that
are targeted to customers in individual as well as multilevel or multichannel environment.
Campaigns developed to communicate customers individually are easy and involves unique
and direct communications. For multichannel environment the implementation of marketing
strategies and campaign management is quite difficult and challenging. For example, some
retailers have multichannel transactions like shops or stores, wholesale stores, websites, home
shopping and even television shopping. Here integration and implementation of
communication strategy is difficult and evaluation of performance and quality of campaigns
needs to be automated and should be technologically sound across each of the channels. For
handling this, a CRM marketing strategy called event-based marketing is inherited. Using
event based marketing communication and offers are presented to customers as and when
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they are required. For example, credit card customer calls the call centre for inquiring the
current interest rates, this indicates that customer is specific about the interest rates and is
trying to compare the interest rates and may switch to different competitor to find specific
deals which suits him. Without wasting time the automated CRM system pops up an event of
offer which is best suited for that customer and helps to retain him back.
2. Sales-force Automation- A CRM system is not only used to deal with the existing customers
but is also useful in acquiring new customers. The process first starts with identifying a
customer and maintaining all the corresponding details into the CRM system. This process
can be distributed into many stages which includes generation of lead and then qualifying
those leads as prospects. The Sales and Field representatives then try getting business out of
these customers by sophistically following up with them and converting them into a winning
deal. Automation of selling process is efficiently handled by Sales-force automation which
automates all the methodologies or sales cycle and above described process sophisticatedly.
3. Service Automation- Service automation deals with managing organization’s service. The
actual interactions with customers such as contact, direct sales, direct mail, call centres, data
aggregation systems, web sites and blogs etc. are examples of operational CRM. Each
interaction with a customer can be collected to the client database generally known as
‘customer’s history’ and the information can later be used wherever necessary. Anyone in the
organization can have access to this information about customer which gives a clear view of
customers needs and important information on the customer such as products owned, prior
support calls etc. It naturally eliminates the need to obtain this information individually from
the customer. On the basis of the information, if required, the customer can easily be
contacted at right time at the right place.

Operational CRM refers to services that provide support for various ‘front office’ business processes
in helping organization to take care of their customers. Focus on customers’ value is important for a
successful operational CRM strategy. Different customers have to be treated differently so
information on variables like customers’ ranking, actual value and potential value is of strategic value.

III. Analytical CRM

Analytical CRM supports organizational back-office operations and analysis. It deals with all the
operations and processes that do not directly deal with customers. Hence, there is a key difference
between operational CRM and Analytical CRM. Unlike from operational CRM, where automation
of marketing, sales-force and services are done by direct interaction with customers and determining
customer’s needs, analytical CRM is designed to analyze deeply the customer’s information and data
and unwrap or disclose the essential convention and intension of behaviour of customers on which
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capitalization can be done by the organization.

Primary goal of analytical CRM is to develop, support and enhance the work and decision making
capability of an organization by determining strong patterns and predictions in customer data and
information which are gathered from different operational CRM systems.

The following are the key features of analytical CRM:

 Seizing all the relevant and essential information of customers from various channels and
sources and collaboratively integrating and inheriting all this data into a central repository
knowledge base with an overall organization view.
 Determining, developing and analyzing inclusive set of rules and analytical methods to scale
and optimize relationship with customers by analyzing and resolving all the questions which
are suitable for business.
 Implementing or deploying the results to enhance the efficiency of CRM system and
processes, improve relationship and interaction with customers and the actual business
planning with customers.
 Combine and integrate the values of customers with strategic business management of
organization and value of stakeholders.

Analytical CRM is a solid and consistent platform which provides analytical applications to help
predict, scale and optimize customer relations. Advantages of implementing and using an analytical
CRM are described below.

1. Leads in making more profitable customer base by providing high value services.
2. Helps in retaining profitable customers through sophisticated analysis and making new
customers that are clones of best of the customers.
3. Helps in addressing individual customer’s needs and efficiently improving the relationships
with new and existing customers.
4. Improves customer satisfaction and loyalty.

The power of CRM provides a lot of managerial opportunities to the organization. It implements the
customer information in an intelligent way and creates views on customer values, spending, affinity
and segmentation. Analysis is done in every aspect of business as described below:

1. Customer Analytics- This is the base analytic used to analyze customer knowledge base. It
provides a better view of customer behaviour and by modelling, assessing customer values
and assessing customer’s portfolio or profiles and creates an exact understanding of all the
customers.
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2. Marketing Analytics- This helps discovering new market opportunities and seeks their
potential values. It also helps in managing marketing strategies and scale and plan marketing
performance at district, regional and national levels. Marketing analytics also focus on
campaign management and planning, product analysis and branding.
3. Sales Analytics- Sales analytic provides essential environment to plan, simulate and predict
sales volumes and profits by constantly analyzing organizational sales behaviour. It helps in
pipelining all the selling opportunities in an efficient way by indulging and improving the
sales cycle.
4. Service Analytics- Analytical CRM has major role in enhancing the services which
answering all the questions regarding customer satisfaction, quality and cost of products,
complaint management etc. It even helps in improving and optimizing the services by
sophistically analyzing the service revenue and cost.
5. Channel Analytics- This type of analysis helps to determine the customer behaviour on
channel preferences, like web channel, personal interaction, telephone channel etc. This
information is efficiently integrated in customers’ knowledge base so that they can be
contacted accordingly.

The essential results produced by Analytical CRM system could diversely help the organization to
tackle customers’ based on values. It also helps in determining which customer is best to invest in,
which can be treated at an average level and which should not be invested in.

IV. Collaborative CRM

Collaborative CRM deals with synchronization and integration of customer interaction and channels
of communications like phone, email, fax, web etc. with the intent of referencing the customers a
consistent and systematic way. The idea is not only enhancing the interactions but also to increase
and improve customer retention and liberty.

Collaborative CRM entangles various departments of organization like sales, marketing, finance and
service and shares the customer information among them to highlight better understanding of
customers. For example, the information of preferred products could be shared with marketing
department so that analysis can be performed in this aspect to provide preferred products to
customers. The information regarding varied cost or price of a particular product in market defined
by customers can be delivered to finance department so that strategies could be created to match the
product cost with similar products in market and after analysis bring an affordable and efficient
product in market. The information regarding a specific service which is not installed in the
company’s environment and intimated by the customers can be transferred to service
department to improve or install that particular service in-house. All this is done efficaciously within
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the range of channels so that the process automates the needs and minimal time is required for
fulfilling these needs.
Collaborative CRM can be broadly identified by two aspects:

1. Interaction Management- This management process deals with designing the

communication or interaction channel process within an organization which is specific to
customer interaction and finally enhancing the extent of communication between both the
parties. The communication channel depends on the customers’ preference on how they
require the interaction to be dealt with. Some customers prefer to be contacted via phone and
email because of more comfort ability or non availability of manual interaction due to no time
or unavailability of resources. Some of them prefer to have live online meeting or web
meeting to reduce the travel time and lack of time or maybe they prefer more clarified real
time environment by sitting at desk and transact. Some of the customers insist for agent
conducted services which is often face-to-face interaction as they believe that this way is
more efficient and conclusive. Depending on these channels of interaction it is very important
for organization to fulfil these needs of customers and gather information from them and
implementing it into the CRM before interacting to enhance the interaction power.
2. Channel Management- After analyzing and implementing the interaction medium it’s
important to enhance the power of channels through which the customers are interacted. By
using latest technological aspects for improving channel interaction could help to contact
customers in an efficient way and gather information from them to help organization to
understand the customers. Hence it is important for an organization to clearly arrange the
channel responsibilities and duties.

Below are advantages of Collaborative CRM:

 Enables valued customer interaction across the channels.

 Entangles web or online collaboration to cut down service cost of customers.
 Integrates customer interaction with call centres to enable multi-channel interaction with
customers and helps them make understand the overall process vales.
 Describes a view of integrated customer’s details during interaction to server them in a better
way.

This CRM solution brings customers, process and strategies and data together so that organizations
could serve and retain customers more efficiently.
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SCOPE OF CRM
1. Sales force automation

Sales force automation (SFA) involves using software to streamline all phases of the sales process,
minimizing the time that sales representatives need to spend on each phase. This allows sales
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representatives to pursue more clients in a shorter amount of time than would otherwise be possible.
At the heart of SFA is a contact management system for tracking and recording every stage in the
sales process for each prospective client, from initial contact to final disposition. Many SFA
applications also include insights into opportunities, territories, sales forecasts and workflow
automation, quote generation, and product knowledge. Modules for Web 2.0 e-commerce and pricing
are new, emerging interests in SFA.

2. Marketing

CRM systems for marketing help the enterprise identify and target potential clients and generate leads
for the sales team. A key marketing capability is tracking and measuring multichannel campaigns,
including email, search, social media, telephone and direct mail. Metrics monitored include clicks,
responses, leads, deals, and revenue. This has been superseded by marketing automation and Prospect
Relationship Management (PRM) solutions which track customer behaviour and nurture them from
first contact to sale, often cutting out the active sales process altogether.

3. Customer service and support

Recognizing that service is an important factor in attracting and retaining customers, organizations are
increasingly turning to technology to help them improve their clients’ experience while aiming to
increase efficiency and minimize costs. Even so, a 2009 study revealed that only 39% of corporate
executives believe their employees have the right tools and authority to solve client problems“. The
core for these applications has been and still is comprehensive call center solutions, including such
features as intelligent call routing, computer telephone integration (CTI), and escalation capabilities.

4. Analytics

Relevant analytics capabilities are often interwoven into applications for sales, marketing, and service.
These features can be complemented and augmented with links to separate, purpose-built applications
for analytics and business intelligence. Sales analytics let companies monitor and understand client
actions and preferences, through sales forecasting and data quality.

Marketing applications generally come with predictive analytics to improve segmentation and
targeting, and features for measuring the effectiveness of online, offline, and search marketing
campaign. Web analytics have evolved significantly from their starting point of merely tracking
mouse clicks on Web sites. By evaluating “buy signals,” marketers can see which prospects are most
likely to transact and also identify those who are bogged down in a sales process and need assistance.
 22

Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a
whole.

These types of analytics are increasing in popularity as companies demand greater visibility into the
performance of call centers and other service and support channels, in order to correct problems
before they affect satisfaction levels. Support-focused applications typically include dashboards
similar to those for sales, plus capabilities to measure and analyze response times, service quality,
agent performance, and the frequency of various issues.

5. Integrated/Collaborative

Departments within enterprises — especially large enterprises — tend to function with little
collaboration.[8] More recently, the development and adoption of these tools and services have
fostered greater fluidity and cooperation among sales, service, and marketing. This finds expression in
the concept of collaborative systems which uses technology to build bridges between departments.
For example, feedback from a technical support center can enlighten marketers about specific services
and product features clients are asking for. Reps, in their turn, want to be able to pursue these
opportunities without the burden of re-entering records and contact data into a separate SFA system.
Owing to these factors, many of the top-rated and most popular products come as integrated suites.

6. Small business

For small business, basic client service can be accomplished by a contact manager system: an
integrated solution that lets organizations and individuals efficiently track and record interactions,
including emails, documents, jobs, faxes, scheduling, and more. These tools usually focus on accounts
rather than on individual contacts. They also generally include opportunity insight for tracking sales
pipelines plus added functionality for marketing and service. As with larger enterprises, small
businesses are finding value in online solutions, especially for mobile and telecommuting workers.

7. Social media

Social media sites like Twitter, LinkedIn and Facebook are amplifying the voice of people in the
marketplace and are having profound and far-reaching effects on the ways in which people buy.
Customers can now research companies online and then ask for recommendations through social
media channels, making their buying decision without contacting the company.

People also use social media to share opinions and experiences on companies, products and services.
As social media is not as widely moderated or censored as mainstream media, individuals can say
anything they want about a company or brand, positive or negative.
 23

Increasingly, companies are looking to gain access to these conversations and take part in the
dialogue. More than a few systems are now integrating to social networking sites. Social media
promoters cite a number of business advantages, such as using online communities as a source of
high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. Companies
can also leverage client stated habits and preferences to "hyper-target" their sales and marketing
communications.

Some analysts take the view that business-to-business marketers should proceed cautiously when
weaving social media into their business processes. These observers recommend careful market
research to determine if and where the phenomenon can provide measurable benefits for client
interactions, sales and support. It is stated that people feel their interactions are peer-to-peer between
them and their contacts, and resent company involvement, sometimes responding with negatives
about that company.

8. Non-profit and membership-based

Systems for non-profit and membership-based organizations help track constituents and their
involvement in the organization. Capabilities typically include tracking the following: fund-raising,
demographics, membership levels, membership directories, volunteering and communications with
individuals.

Many include tools for identifying potential donors based on previous donations and participation. In
light of the growth of social networking tools, there may be some overlap between social/community
driven tools and non-profit/membership tools.
 24

CRM BUSINESS CYCLE

As shown in the diagram below, any organization starts with the acquisition of
customers.

Acquire and
Retain

Interact and deliver Understand and

CRM Differentiate

Develop and
customize

1. Acquisition and Retaining

Acquisition is a vital stage in building customer relationship. For purpose of customer acquisition an
organization is likely to focus its attention the suspects, enquiries, lapsed customers, former
customers, competitor’s customers referrals, and the existing buyers. From these the organizations
need to acquire customers and prospective customers and retain valuable customers.

2. Understand and Differentiate

Organizations cannot have a relationship with customers unless they understand them...what they
value, what types of service are important to them, how and when they like to interact and what they
want to buy. True understanding is based on a combination of detailed analysis and interaction.
Several activities are important:
 25

 Profiling to understand demographics, purchase patterns and channel preference

 Segmentation to identify logical unique groups of customers that tend to look alike and
behave in a similar fashion. While the promise of one-one marketing sounds good, we have
not seen many organizations that have mastered the art of treating each customer uniquely.
Identification of actionable segments is a practical place to start.
 Primary research to capture needs and attitudes.
 Customer valuation to understand profitability, as well as lifetime value or long term
potential. Value may also be based on the customer’s ability or inclination to refer other
profitable customers.

Customers need to see that the company is tailoring service and communications based on what they
have learned independently and on what the customers have told them.

3. Develop and Customize

In the product world of yesterday, companies developed products and services and expected
customers to buy them. In a customer – focused world, product and channel development has to
follow the customer’s lead. Organizations are increasingly developing products and services, and even
new channels based on customer needs and service expectations.

4. Interact and Deliver

Interaction is also a critical component of a successful CRM initiative. It is important to remember
that interaction doesn’t just occur through marketing and sales channels and media; customers interact
in many different ways with many different areas of the organization, including distribution and
shipping, customer service and online. With access to information and appropriate training,
organizations will be prepared to steadily increase the value they deliver to customers.
 26

COMPONENTS OF CRM
CRM consists of three components:
 customer,
 relationship, and
 Management (Figure 1).

CRM tries to achieve a ‘single integrated view of customers’ and a ‘customer centric approach’
[Roberts-Witt, 2000].

CUSTOMER

CRM

RELATIONSHIP MANAGEMENT

Fig 1. Components of CRM

Customer: The customer is the only source of the company’s present profit and future growth.
However, a good customer, who provides more profit with less resource, is always scarce because
customers are knowledgeable and the competition is fierce. Sometimes it is difficult to distinguish
who is the real customer because the buying decision is frequently a collaborative activity among
participants of the decision-making process. Information technologies can provide the abilities to
distinguish and manage customers. CRM can be thought of as a marketing approach that is based on
customer information.
 27

Relationship: The relationship between a company and its customers involves continuous bi
directional communication and interaction. The relationship can be short-term or long-term,
continuous or discrete, and repeating or one-time. Relationship can be attitudinal or behavioural. Even
though customers have a positive attitude towards the company and its products, their buying
behaviour is highly situational. For example, the buying pattern for airline tickets depends on whether
a person buys the ticket for their family vacation or a business trip. CRM involves managing this
relationship so it is profitable and mutually beneficial. Customer lifetime value (CLV) is a tool for
measuring this relationship.

Management: CRM is not an activity only within a marketing department. Rather it involves
continuous corporate change in culture and processes. The customer information collected is
transformed into corporate knowledge that leads to activities that take advantage of the information
and of market opportunities. CRM required a comprehensive change in the organization and
its people.
 28

CRM SOFTWARES
1. Sales Force Automation

 Contact management
Contact management software stores, tracks and manages contacts, leads of an enterprise.
 Lead management
Enterprise Lead management software enables an organization to manage, track and forecast sales
leads. Also helps  understand and improve conversion rates.

2. E-CRM or Web based CRM

 Self Service CRM

Self service CRM (e-CRM) software Enables web based customer interaction, automation of email,
call logs, web site analytics, campaign management.
 Survey Management Software
Survey Software automates an enterprise's Electronic Surveys, Polls, Questionnaires and enables
understand customer preferences.

3. Customer Service

 Call Center Software

 Help Desk Software

4. Partner Relationship Management

 Contract Management Software: Contract Management Software enables an enterprise to

create, track and manage partnerships, contracts, agreements.
Example: Upside Software, Accruent Software, diCarta, I-Many.
 Distribution management  Software
 29

CRM AND MARKETING

CRM leverages and amplifies customer base of an organization through efficacious and efficient
marketing. In fact CRM has brought up new dimensions in the field of marketing by significantly
improving marketing functioning and execution. Intuitive CRM associated marketing strategies like
direct marketing, web marketing, e-mail marketing etc. have been matured during the recent past.
These marketing strategies are more promising as compared to the traditional ways on marketing as
they help delivering higher-up performance and walloping business. They also help meliorating
response rates in marketing campaigns, cut cost on promotions due to low asset values and provide
higher scrutiny on organizational investments.

The various aspects of CRM oriented marketing are discussed below.

1. Web Marketing- With the growing popularity of web, customers are tending towards web
marketing or web shopping. This helps both customers and suppliers to transact in a real time
environment irrespective of their locations. Some of the major advantages of Web Marketing
are listed below:
 It is relatively very inexpensive as it reduces the cost for physically reaching to the
target customers for interaction.
 Suppliers can reach to more number of customers in lesser amount of time.
 The online marketing campaigns can be easily tracked, traced, calculated and tested.
 The selection process of any product or brand is simplified due to proven online
research and analysis techniques.
 Online marketing campaigns are more promotional as compared to manual
campaigns.
2. Email Marketing- Email marketing has turned out to be more efficacious and inexpensive as
compared to mail or phone based marketing strategies. Email marketing is direct marketing
which is data driven and leads to more accurate customer response and effective fulfilment of
customer needs. More attractive features include newsletters, sending of eCoupons, eCards,
provision of saving events into calendars etc.
3. Analyzing customers buying behaviour online- A CRM system provides a platform to
analyze the customers buying behaviour online. This interactive strategy provides great
accuracy with high speed which includes profiling services furnishing elaborated bits of
information regarding customers purchasing habits or behaviour. Individualized analysis of
this behaviour also helps to identify to which product or brand the customers are more tended.
For example an online selling website www.xyz.com can analyze the customers buying
behaviour by installing an in-house service with the help of a full-fledged CRM that checks
 30

what all products are being purchased by a particular customer and under which specific
group they fall. This is achieved by personalized analyzing the buying history of customers in
the past which predicts the future business with those customers also. This accomplishes to
build a long-term relationship with customers by properly canvassing customer needs and
resulting in customer satisfaction. Analyzing this particular buying behaviour of customers
online also helps to fix or change of marketing techniques or strategies to mould the system
according to the future perspectives.
4. Forecasting future marketing strategies- Down the line marketing strategies keeps on
changing according to the emotional behavioural change of customers. CRM market
forecasting techniques help to understand this change through regression and statistical
analysis of customer behaviour online. These are some complex but more accurate analysis
techniques provided by CRM system which are proved to be one of best marketing strategies.
This innovative approach is carried out with greater risks but is believed to outturn
astonishing rewards.
5. Building business impact models- It is important for an organization to have check on
marketing performance regularly so that the techniques never deteriorate and always match to
yield greater results. These CRM oriented models help in delivering accurate measurement of
marketing performance throughout the organization and to do better every time.

These synergistic marketing strategies make a part of CRM system to develop high-end marketing
business. Hence it is very important for an organization to incorporate them by carefully anticipating
change, testing their performance and assembling the best possible combination of these strategies to
meet the needs of the customers and maximize its marketing growth.
 31

SIX MARKET FRAMEWORK

The broadened view of relationship marketing addresses a total of six key market domains, not just
the traditional customer market. The Six markets are:

1. Customer Markets – Existing and prospective customers as well as intermediaries.

2. Referral Markets – Existing Customers who recommend to other prospects, and referral sources or
multipliers such as doctors who refer patients to a hospital
3. Influence Markets – Government, consumer groups, business press and financial analysts.
4. Recruitment Markets – For attracting the right employees to the organization
5. Supplier Markets – Suppliers of raw materials, components, services etc.
6. Internal Markets – The organization including internal departments and staff.
 32

WORK FLOW OF CRM

A simplified CRM workflow is as follows.

1. Collecting Customer Data and Information

Acquisition of customers and basic data including name, address, gender, age, etc, is
fundamental, but transaction data such as date, time, item, value, etc. at every “touch point,”7 i.e., a
point of interaction when the company communicates with a customer, or vice versa, are also
essential. Information is often needed to complement these data. It is “a knowledge that comes from
asking questions to customers such as why and how.”

2. Analyzing Data to Predict Customer Behaviour

Marketers use these data and information so that they can record the interests and preferences
of customers. Furthermore, they attempt to ascertain purchasing patterns on the basis of transaction
records. “Using sophisticated modelling and data mining techniques, behaviour prediction uses
historical customer behaviour to foresee future behaviors.”9 Understanding the tendency that a certain
type of customer is apt to purchase a specific product (“propensity-to-buy analysis”) and that certain
products are often bought with other specific products by a particular type of customer (“product
affinity analysis”) has a beneficial effect on making marketing decisions.

3. Marketing Campaigns: Applying the Results of Analysis

Companies conduct marketing campaigns that are designed on the basis of the results of
analysis or on hypotheses. They promote their products through various channels, such as e-mail, the
Internet, telemarketing, or direct mail. They also contact their customers for follow-up after purchase.
And, of course, they have to monitor the results of that campaign in order to refine future campaigns.
With CRM software, they can, for the most part, automate these processes.

4. Measuring Results, Revising Hypotheses, and Repeating This Workflow Process

To improve their results, companies need to evaluate the effects of their marketing
campaigns. They should measure whether and how given campaigns achieves its original goal and
revise their hypotheses according to the results. After that, they should repeat the workflow process,
thereby making gradual progress.
 33

PROCESS OF CRM
The CRM process is the most influential customer oriented strategy of the decade. Despite its humble
origins it has evolved into a relatively complex strategy. The essentials of a CRM program include
focus, commitment to CRM goals and above all a desire to be customer focused. Here's how the CRM
process actually works in an organization.

A look at the steps in the CRM process

1. Establishing CRM goals
2. Educating other departments
3. Assembling customer information
4. Designing the data model
5. Vendor study
6. Selecting the CRM solution
7. Establishing authority & responsibility
8. Pilot projects
9. Communication with customers through direct mail , electronic mail etc
10. Customer surveys
11. Customer satisfaction program
12. Collection of customer information
13. Provision of customer information to employees
14. Usage of customer information in the business activities
15. Feedback
16. Analyze
17. Documenting a new process
18. Implementing final methodology
 34

REASONS FOR ADOPTING CRM: THE

BUSINESS DRIVERS
Competition for customers is intense. From a purely economic point of view, firms learned that it is
less costly to retain a customer than to find a new one. The oft-quoted statistics1 go something like
this:

 By Pareto’s Principle, it is assumed that 20% of a company's customers generate 80% of its
profits.

 In industrial sales, it takes an average of 8 to 10 physical calls in person to sell a new

customer, 2 to 3 calls to sell an existing customer.

 It is 5 to 10 times more expensive to acquire a new customer than obtain repeat business from
an existing customer. For example, according to the Boston Consulting Group [Hildebrand,
2000], the costs to market to existing Web customers is $6.80 compared to $34 to acquire a
new Web customers.

 A typical dissatisfied customer tells 8 to 10 people about his or her experience.

 A 5% increase in retaining existing customers translates into 25% or more increase in

profitability.
 35

PRINCIPLES OF CRM
The overall processes and applications of CRM are based on the following basic
principles.

 Treat Customer Individually

Remember customers and treat them individually. CRM is based on philosophy of
personalization. Personalization means the ‘content and services to customer should be designed
based on customer preferences and behaviour.’ [Hagen, 1999] Personalization creates convenience to
the customer and increases the cost of changing vendors.

 Acquire and Retain Customer Loyalty through Personal Relationship

Once personalization takes place, a company needs to sustain relationships with the customer.
Continuous contacts with the customer – especially when designed to meet customer preferences –
can create customer loyalty.

 Select “Good” Customer instead of “Bad” Customer based on Lifetime Value

Find and keep the right customers who generate the most profits. Through differentiation, a
company can allocate its limited resources to obtain better returns. The best customers deserve the
most customer care; the worst customers should be dropped.

In summary, personalization, loyalty, and lifetime value are the main principles of CRM
implementation.
 36

MYTHS OF CRM
Myth 1: Excellent CRM system guarantees marketing success.

CRM is not a strategy but a tool to help and modify the marketing strategies of a company.
Before it achieves a viable CRM system, a company needs the right value propositions and strategies
to implement the customer centric philosophy of the CRM. CRM requires more commitment and
loyalty by the company to the customer rather than by the customer to the company. Without
competitive products and services, a company cannot obtain the benefits of CRM.

Myth 2: To use CRM, a company must be organized by customer segments rather than
products.

Organizational restructuring is expensive, time-consuming, and painful process for a company and the
people in the company. Without appropriate coordination with other functions in a company,
restructuring is not as effective as expected. For example, channel strategies should be combined with
CRM capabilities so a customer does not receive different offers from a company through different
channels.

Myth 3: Successful CRM requires a large centralized database with complete customer data.

Many successful financial companies maintain databases at the product level. By having a smaller
database, a company can simplify the system design and maintenance and the customer ownership.
Common standards of hardware and software are more important than large databases.

Myth 4: CRM requires the most advanced and sophisticated analytical techniques.

Clean data is more important and effective than sophisticated analytical tools. Frequently incomplete,
inaccurate, and outdated customer information is used. If there is garbage in, the output is also
garbage. Future-oriented and hypothesis-based analysis and anticipation are more effective than
complex analysis.

Myth 5: CRM is a turnkey project.

Database, infrastructure, and supporting business processes are required to start CRM programs.
However, it is not necessary to set up everything together. Rather CRM is a ‘test, run, test’ process.
 37

An iterative and incremental approach is cheaper and more effective than turnkey based approach.
Lessons from mistakes are important to educate employees about how to use CRM.
 38

USE OF TECHNOLOGY IN CRM

The application of technology is the most exciting, fastest growing and changing the way customers
get information about products and services. Technology includes all the equipment, software, and
communication links that organizations use to enable or improve their processes. The mostly used
tools are explained below:

Sales Force Automation

These systems help in automating and optimizing sales processes to shorten the sales cycle and
increases sales productivity. They enable the company to track and manage all qualified leads,
contacts and opportunities throughout the sales cycle including customer support. They improve the
effectiveness of marketing communications programmes for generating quality leads as well as
greater accuracy in sales forecasting. The Internet can be used by the company in imparting proper
training to its sales force. In depth product information, specialized databases of solutions, sales force
support queries, and a set of internal information on the Internet can improve the productivity of the
sales force.

Call Centres

Call Centre helps in automating the operations of in bound and outbound calls generated between
company and its customers. These solutions integrate the voice switch of automated telephone
systems with an agent host software allowing for automatic call routing to agents, auto display of
relevant customer data, predictive dialling, self –service Interactive Voice Response systems, etc.
These Systems are useful in high volume segments like banking, telecom and hospitality. Today,
more innovative channels of interacting with customers are emerging as a result of new technology,
such as global telephone based call centres and the Internet. Companies are now focusing to offer
solutions that leverage the internet in building comprehensive CRM systems allowing them to handle
customer interactions in all forms.

Data Warehousing

A data warehouse is an implementation of an informational database used to store shareable data that
originates in an operational database-of-record and in external market data sources. It is typically a
subject database that allows users to tap into a company’s vast store of operational data to track and
respond to business trends and facilitates forecasting and planning efforts.
 39

Data Mining and OLAP

Data mining involves specialized software tools that allow users to sift through large amounts of data
to uncover data content relationships and build models to predict customer behaviour. Data mining
uses well-established statistical and machine learning techniques to build models that predict
customer behaviour. OLAP (Online Analytical Processing), also known as multi-dimensional data
analysis, offers advanced capabilities in querying and analyzing the information in a data warehouse.
In some CRM initiatives, OLAP plays a major role in the secondary analysis that takes place after
initial customer segmentation has occurred. For example, in CRM – based campaign management
systems, OLAP is an excellent tool for analyzing the success or failure of the promotional campaigns.

Decision Support and Reporting Tools

Web enabled reporting tools and executive information systems are used to deploy the business
information that has been discovered. This enhanced customer knowledge is distributed to executive
decision- makers as well as to the operational customer contact points. Applications equipped with
some of the same sophisticated modelling routines developed in the data-mining phase are applied to
individual contacts in real time.
Electronic point of Sale (EPOS)

The main benefit of EPOS and retail scanner systems is the amount of timely and accurate
information they deliver. Advances in the technology have significantly aided the scope for data
analysis. In addition to the original scanner-related data on sales rate, stock levels, stock turn, price
and margin, retailers now have information about the demographics, socio-economic and lifestyle
characteristics of consumers.
 40

CRM LEADERS

The work of CRM involves focusing on service automated processes, information gathering and
processing, integrating and automating various customer serving processes in a company. It also
manages to keep track of customer preferences, buying habits, deals with service requests,
information requests, complaints etc. It deals directly with the customer. For ex call centers use
Customer Relationship Management to store customer information. It enables them to retrieve and
store information and serve the customer efficiently. It also helps them to encourage new customers,
cater to the needs of the older ones and basically achieve customer retention. Finding a CRM software
vendor is easy work but what's important is getting one that works for you.

The leaders in the field include:

1. Oracle
Oracle is the leader in the CRM field. The company currently offers 50 CRM applications that are
able to provide for all the customer service requirements of small, medium and large industries.
Oracle provides CRM applications that aid the organization through improved business processes.
What does Oracle have to offer? The answer is accurate information. In addition to that the
functionality it offers is just as important. It manages to provide excellent support for all departments
within the organization like customer support, added services and additional

2. SAP
SAP was established in 1972 and is now a leader in the provision of business solutions for all types of
industries. It is a CRM software vendor that caters to businesses worldwide and currently serves more
than 32,000 customers. SAP has a presence in more than 50 countries. It is the world's largest
business software company. It is the world's third-largest independent software provider overall and
employs more than 35,000 people.They are able to provide excellent customer service and support. It
boasts of having the Knowledge, Experience, and Technology that is needed to optimize Business
efficiency. It manages to provide a range of solutions that cater to every aspect of the business.

The benefits from SAP are:

 Better efficiency

 Cost reduction

 Better performance

 Adaptability to business environment

 41

 Overall Growth

One advantage SAP has is that SAP Ventures invests in new companies that are interested in finding
new technologies. This enables them to stay ahead in the rat race. SAP offers several solutions for
Customer Relationship Management and is able to deliver customer-centric solutions that revolve
around each customer. It helps the organization to support the various departments like marketing,
sales, and service and provides them with good analytics as well as excellent interaction capabilities.

SAP CRM supports the customer-related processes and deals with all customer-related activities
across all departments. It sources and gathers together all customer data in the organization in order to
facilitate better decisions. It enables company's address their business needs adequately, manages to
achieve the business objectives and reaps the required return on investment.

Sales Force
This unique provider manages to provide simple yet effective customer relationship management
products that equip the business with the capacity to increase its effectiveness. It offers a wide range
of solutions from marketing to sales force automation to customer service and support. It boasts of
being the world's first on-demand application-sharing service. It provides customizable CRM
solutions that integrate extremely well. It aids on-demand applications and succeeds extremely well at
this. Its main feature is its ability to manage and share information easily.

Its provisions include:

 Analytics

 Sales Force Automation

 Custom Applications

 Marketing Automation

 Customer Service & Support

Right Now Business Models

Right Now Technologies provides organizations with the necessary on demand CRM solutions that
are needed to build a customer centered business. Its appeal lies in its technology, commitment to
customer success and its ability to deliver a high ROI and capacity to achieve customer retention. Its
clients number more than 1,400 organizations. It is able to achieve better customer relationships that
cater to customers needs adequately. It helps organizations to understand and deal with their
customers better.Right Now manages to provide a holistic view of the customer and the customer
data.
 42

It also helps in identifying customers, satisfying them and ultimately retaining them. Sales revenue
increases along with overall productivity and growth. It increases the quality of service effectiveness.
The sales department as well benefits as shorter sales cycles, increased revenue from sales, and better
sales efforts. From the marketing perspective marketing efforts are sharpened and marketing
campaigns are improved. Right Now Technologies as a CRM software vendor has so much to offer
the customer as they have exhibited leadership in the customer service field and enables the
organization to actually focus a whole lot more on the customer.
 43

BENEFITS OF CRM

These tools have been shown to help companies attain these objectives:

 Streamlined sales and marketing processes

 Higher sales productivity
 Added cross-selling and up-selling
 Improved service, loyalty, and retention
 Increased call center efficiency
 Higher close rates
 Better profiling and targeting
 Reduced expenses
 Increased market share
 Higher overall profitability
 Marginal costing
 44

CHALLENGES IN CRM

Despite the benefits, many companies are still not fully leveraging these tools and services to align
marketing, sales, and service to best serve the enterprise.

Tools and workflows can be complex to implement, especially for large enterprises. Previously these
tools were generally limited to contact management: monitoring and recording interactions and
communications. Software solutions then expanded to embrace deal tracking, territories,
opportunities, and at the sales pipeline itself. Next came the advent of tools for other client-facing
business functions, as described below. These technologies have been, and still are, offered as on-
premises software that companies purchase and run on their own IT infrastructure.

Often, implementations are fragmented; isolated initiatives by individual departments to address their
own needs. Systems that start disunited usually stay that way: siloed thinking and decision processes
frequently lead to separate and incompatible systems, and dysfunctional processes.
 45

CRM ISSUES
 CUSTOMER PRIVACY
Customer privacy is an important issue in CRM. CRM deals with large amounts of customer
data through various touch points and communication channels. The personalization process in CRM
requires identification of each individual customer and collections of demographic and behavioural
data. Yet, it is the very information that most customers consider personal and private. The individual
firm is thus caught in an ethical dilemma. It wants to collect as much information as possible about
each customer to further its sales, yet in doing so it treads at and beyond the bounds of personal
privacy. Privacy issues are not simple. There are overwhelming customer concerns, legal regulations,
and public policies around the world. Still it is unclear and undetermined what extent of customer
privacy should be protected and shouldn’t be used, but four basic rules might be considered.

o The customer should be notified their personal information is collected and will be
used for specific purposes.
o The customer should be able to decline to be tracked.
o The customer should be allowed to access their information and correct it.
o Customer data should be protected from unauthorized usage.

Some companies provide ‘customer consent form’ to ask the customer to agree
to information collection and usage. Providing personalized service to customer is a way to satisfy
customers who provided their personal information. All of these efforts are designed to build trust
between the company and its customers.

 TECHNICAL IMMATURITY
The concept, technologies, and understanding of CRM are still in its early adapter stage. Most
of the CRM technologies are immature and the typical implementation costs and time are long enough
to frustrate potential users. Many software and hardware vendors sell themselves as complete CRM
solution providers but there are little standardized technologies and protocols for CRM
implementation in the market. Even the scope and extent of ‘what CRM includes’ differ from vendor
to vendor; each has different implementation requirements to achieve the customer’s expectations.
CRM is one of the busiest industry which occurs frequent merger and acquisition. Many small
companies merge together to compete with large vendor. Large companies such as PeopleSoft
acquired small vendor to enter this ‘hot’ CRM market. Due to these frequent merger and acquisition,
the stable technical support from the market becomes rare. Vendors publish new version – maybe
 46

more integrated software – of CRM software as frequently as they can and customers should pay for
that.

Often these technical immaturities or unstable conditions are combined with the customer
requirements which are frequently unclear and lead the project failure. These technical immaturities
may be overcome over time, but the process may be long and painful.
 47

CASE STUDY

ICICI BANK’S CRM INITIATIVES

ICICI Bank has to manage more than 13 million customers.  The bank has over 550 branches, a
network of 2025 ATMs, multiple call centers, Internet banking and mobile banking.  Its customers
often use multiple channels, and they are increasingly turning to electronic banking options. ATMs
and other electronic channels now comprise more than 50 per cent of all transactions.

In the process of making its business grow to this level, ICICI Bank has distinguished itself from
other banks through its relationship with customers.

The Teradata solution focuses on a Customer Relationship Management (CRM) platform. 

Information from various legacy and transaction systems is fed into a single enterprise called wide
data warehouse.  This allows the bank to generate a single view of its customers.  The warehouse has
the capability to integrate data from multiple sources comprising Oracle and flat files.   The Behavior
Explorer enables profiling of customers and querying on various parameters.  These enable the bank
staff create suitable campaigns for targeting individual customers on the basis of their requirements.

The logistics in the system have also led to other benefits like interactive reports, unearthing cross-
selling opportunities as well as finding out about the channel usage undertaken by a segment.  The
data access was facilitated through the use of Cognos Power Cubes.

The Benefits of CRM

 Customers’ usage pattern: ICICI’s CRM data warehouse integrates data from multiple sources
and enables users to find out about the customer’s various transactions pertaining to savings
accounts, credit cards, fixed deposits, etc.  The warehouse also gives indications regarding the
customer’s channel usage.
 New product development: Analysis at ICICI guide product development and marketing
campaigns through Behaviour Explorer, whereby customer profiling can be undertaken by
using ad hoc queries.  The products thus created take into account the customer’s needs and
desires, enabling the bank to satisfy customers through better personalization and
customization of services.
 Central data management: The initial implementation of CRM allowed ICICI to analyse its
customer database, which includes information from eight separate operations systems
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including retail banking, bonds, fixed deposits, retail consumer loans, credit cards, custodial
services, online share trading and ATM.

Some Noteworthy CRM Initiatives of ICICI Bank

Mobile ATMs: Customers of ICICI Bank can access their bank accounts through mobile ATMs. 
These ATMs are kept in vans and parked at locations that have a high traffic of bank customers such
as the commercial areas in a city or up-market residential areas ICICI Bank now provides standard
ATM facilities through ATM vans.  This facility has been tried at Mumbai, Chandigarh and various
places in Kerala during specified timings.

Bulk Deposits: The ICICI Bank’s Bulk Deposit ATMs enable customers to deposit large amounts at
one time.  Unlike conventional ATMs, which are able to accept only 30 notes at a time, these ATMs
allow the deposit of huge amounts.  The Bulk Deposit ATM is available in Mumbai’s Vashi sector
branch office of ICICI. The bulk deposit facility can be availed of by select customers who need to
deposit huge amounts of cash.  ICICI Bank issues a special card called the `Deposit Only Card’ to
facilitate this service.  This card allows for deposit transactions only.  The service is further facilitated
by the provision of special bags at ATMs in which a customer can put his money. After the deposit
slip is filled, the bag can be inserted in the ATM.  The transaction slip is then generated by the ATM
as an acknowledgement of the deposit.  ICICI Bank also has cash pick-up service for business
customers under the business banking segment.

ATMs for the visually challenged: ICICI Bank has launched ATMs with special voice-guided
systems, which guide a visually challenged person to access ATMs without any help.  The jack on the
terminal enables headphones to be connected to it and voice commands enable the customer to
transact business.  Customers may choose a suitable language to get voice commands.  After the
language selection is done, the customer is guided to ensure that the ATM card is inserted in the right
slot and thereafter, guidance is provided for entering the PIN by using the keypad.  A raised button is
provided on number 5 to enable users to identify the numbers easily through touch.  The slot for cash
collection has such raised `pips’ that enable easy identification through touch.

Other Services through ATMs: Apart from the usual transactions involving the bank, some other
services can also be availed of by ICICI Bank customers.  These include:

 Prepaid mobile recharge

 Buying and renewing Internet packs (such as those of TATA Indicom Internet service
provider and Sify).
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 Making donations for Tirupati Tirumala Devasthanams, Nathdwara temple and Shri Mata
Vaishnodevi shrine.
 Mutual fund transactions, and
 Bill payments

Mobile phone as a Virtual Wallet: The mobile phone has been transformed into a virtual wallet – a
new innovation in mobile commerce.  On September 19, 2005, Airtel, ICICI Bank and VISA
announced the launch of mChq – a revolutionary new service – which is a credit card using the
mobile phone.  This is the first mobile-to-mobile payment option which enables Airtel customers and
ICICI Bank Visa cardholders to pay for their purchases with their Airtel Mobile phones.  The service
has eliminated the need for carrying physical cash for making a purchase and also the problems
associated with the point of sale (POS) terminal since the mobile phone services as a secure POS and
a payment mechanism.

Social Events: ICICI Bank organized the largest domestic invitational amateur golf event for HN1
(high-net-worth individuals) customers.  This nation-wide golf tournament had over one lakh high-
net-worth clients of ICICI Bank’s private banking division participating in the event.

Mobile Banking Benefits: Mobile banking enables the customer to avail of many facilities by just
sending an SMS.  These facilities, which are currently offered free of cost, are as follows:

 Locating ATM
 Locating branch
 Locating drop box
 Alert facilities like salary credit, account debit/credit, cheque bounce, etc., and
 Queries on banking, cards and demat account
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CONCLUSIONS
In summary, to implement CRM successfully, you'll have to reorganize your customer and change
your organizational mindset. When CRM works, it helps to solve this problem by meshing everyone
together and focusing the entire organization on the customer. Like all strategic initiatives, CRM
requires commitment and understanding throughout the company, not just in marketing. In all, it adds
to a sense of expectation and loyalty being instilled within the consumer and the development of a
relationship between company and customer that competitors find hard to break. Business decisions
based on complete and reliable information about your customers are very difficult for your
competitors to replicate and represent a key and sustainable competitive advantage.

"A customer is the most important visitor on our premises. He is not an interruption on our work, he is
the purpose of it. We are not doing him a favour by serving him. He is doing us a favour by giving us
an opportunity to do so”
-- Mahatma Gandhi
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BIBLIOGRAPHY
 http://www.stalkked.com/?s=crm

 http://marketingteacher.com/lesson-store/lesson-crm.html

 http://en.wikipedia.org/wiki/Customer_relationship_management

 http://www.crminfoline.com/crm-articles/crm-process.htm

 http://www.managementstudyguide.com/what-is-crm.htm\

 THE IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT, Satoshi Ueno, USJP

Occasional Paper 06-13