Academic year 2017-2018

II year III Semester

Prepared and presented by,

N. Ganesha Pandian,
Assistant professor,
Madurai School of management.
 Definitions

 Concepts and context of relationship

management

 Evolution

 Transactional Vs relationship approach

 CRM as a strategic marketing tool

 CRM significance to the stakeholders

 Customer relationship management can be
defined as a business philosophy and set of
strategies, programs, and systems that
focuses on identifying and building loyalty
with a marketer’s profitable customers.
 The goal is to develop a base of loyal
customers who patronize the retailer
frequently
 According to Gartner, “CRM is a business
strategy designed to optimize profitability,
revenue and customer satisfaction”.
 According to PWC consulting, “CRM is a
business strategy that aims to
understand/appreciate, manage and
personalize the needs of an organization’s
current and potential customers”.
 CRM consists of three definitional
components in its architectural structure:

1. Customer

2. Relationship

3. Management
 Relationship management is a strategy employed
by an organization in which a continuous level of
engagement is maintained between the
organization and its audience.

 Relationship management aims to create a

partnership between the organization and its
audience rather than consider relationship
merely transactional.
 Concepts and context of
Relationship management

Promise Trust

Commitment Satisfaction

Shared goals and

Quality mutual benefits
 The concept of customer relationship
management came into vogue in the mid 1990’s,
CRM has undergone a substantial evolution.
1. First generation (Functional CRM approach)
- Sales force automation (SFA)
-Customer service and support (CSS)
2. Second generation (customer facing front end
approach)
3. Third generation (strategic approach)
1. Strategic CRM: is a core customer centric
business strategy aims at winning and
keeping profitable customers

2. Operational CRM: focuses on the

automation of customer facing processes
such as selling, marketing and customer
service
3. Analytical CRM: focuses on the intelligent
mining of customer related data for
strategical or tactical purposes

4. Collaborative CRM: applies technology

across organizational boundaries with a view
to optimizing company, partner and customer
value
 Product oriented

 Production oriented

 Sales oriented

A customer / Market oriented

 2. Sale force

1. Marketing automation
Account Management
automation
Lead management

 Market segmentation Opportunity

management
 Campaign
Pipeline management
management Contract management

 Event based Quotation and

proposal
marketing
management
Product configuration
3. Service Automation

 Case management

 Inbound communications management

 Queuing and routing

 Service level management

 Transactional marketing or mass marketing is
on individual transaction and does not
concern continuous relationship with
customers

 Relationship marketing focus on continuous

multiple transactions rather than isolated
individual transactions.
Customer
retention

Customer
acquisition

Functionally
Cross- Functionally based
based
marketing
marketing
 Relationship marketing is the practice of using
marketing activities to establish, develop, and
maintain successful long term relationships.

 Relationship marketing has numerous

implications for market planning, employee
training, advertising, promotion, public
relations, direct marketing, package design and
more.
 Mass Marketing Relationship marketing

Discrete transactions Continuing transaction

Short term emphasis Long term emphasis

One-way Two-way
communication communication and
collaboration
Acquisition focus
Retention focus
Share of market
Share of mind
Product differentiation
Customer
differentiation
 Share of customer

 Lifetime value of customers

 Customer equity

 Greater focus on high value customers

 Use of technology
 Understand what motivates customers

 Treat customers individually

 Differentiate offerings

 Increase loyalty

 Providing efficient and consistent service

 Selecting ‘good’ customers instead of ‘bad’

customers based on lifetime value
 Manage customer as an asset

 Rate customers on the basis of their profit

stream – current and future potential

 Using information based decision making

capabilities

 Implement innovative ways and means to get

close to the customer – Hear the voice of
customers
 To provide updated information

 To customize strategies

 To anticipate problems

 To prompt follow-up

 To establish problem solving mechanism

 To assess customer interest

 To integrate functional system

 Strategic CRM is a core customer centric
business strategy aims at winning and
keeping profitable customers

 CRM as a effective strategic marketing tool

acts as a competitive advantage

 CRM helps in strategic planning and reduces

cost to serve
 Business owners
 VP of sales and sales manager
 Salespeople
 Customer service/ support manager
 Customer service representatives
 Business development/ marketing manager
 Financial perspective – CFO/Controller/Accounting
 IT department
 All other employees
 Increased sales revenue and reduced cost of
sales

 Increased customer satisfaction

 Lower costs of recruiting customers

 Increased customer retention

 Evaluation of customer profitability

 Excellent customer service

 Customer knowledge

 Customization

 Positive referral creation

 Reduced cost through customer self-service

 Opportunity to Cross-sell and up-sell

 Decreased general sales and marketing

administrative costs
 Requires top management support

 Confusion in attributes

 Problem in implementation

 Building relationship

 Not functionally organized

 Customer dissatisfaction

 Front line staff

1. CRM is a database marketing

2. CRM is a marketing process

3. CRM is an IT issue

4. CRM is about loyalty scheme

5. CRM can be implemented by any company

 Reduced marketing costs
 Better customer insight
 Life time value
The goal of maintaining customer base must
be to retain existing customers and recruit
new customers that have future profit
potential or are important for other strategic
purposes
1. Recognition

2. Personalization

3. Power

4. Risk reduction

5. Status

6. Affiliation