Prof.

Sunitha Ratnakaram

INTRODUCTION TO CRM
1/26/2012

UNIT1

Emerging trends in marketing

2

Innovative marketing styles

Green Cause Buzz Mobile Network Sports Social

media Paid search ads Permission Marketing

Prof. Sunitha Ratnakaram 1/26/2012

Emerging issues
3

Its not about product its about social behavior Its not about a cheaper product or your idea. Try to change customer behavior.

Its not about better coffee its about the place I am not looking for a drill bit I need to make a hole Its not about the sound its about how it makes me feel Its about my space Its about my video Its about my opinion Its about the experience Its about your choices, places, and time

Examples Apple, Starbucks, MySpace, Harley-Davidson

Prof. Sunitha Ratnakaram 1/26/2012

Old paradigm
4

Value creator

4Ps

Prof. Sunitha Ratnakaram

1/26/2012

New paradigm
5

Value creator

Customer

Product Brand 4Ps

Prof. Sunitha Ratnakaram

1/26/2012

Relevance of WoM
6

Prof. Sunitha Ratnakaram

1/26/2012

Few Marketing Trends for 2011

7

Marketing Trend #1: Increased use of digital media and a decrease in television, radio, and print media. Marketing Trend #2: Increased use of quality, targeted content (textual and video) that tells a company's story well and engages the prospective customer. Marketing Trend #3: Increased use of e-mail to reach out to prospects and customers more frequently at a very low cost.
Prof. Sunitha Ratnakaram 1/26/2012

Continued..
8

Marketing Trend #4: Increased use of blogs, social networking, and other social media to create dialog and relationships with prospects and customers. Marketing Trend #5: Increased use of search engine marketing (SEM) techniques, such as pay-per-click and other trackable paid marketing techniques. Marketing Trend #6: Increased use of online webinars and decreased use of large trade shows. Marketing Trend #7: Increased use of outsourced marketing functions to experienced professionals
Prof. Sunitha Ratnakaram 1/26/2012

CRM Marketing initiatives

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Cross selling and up-selling Customer retention Behavior prediction Customer profitability and value modeling Channel optimization Personalization Event based marketing

Prof. Sunitha Ratnakaram

1/26/2012

Definition
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The automation of horizontally integrated business processes involving front office customer contact points (marketing, sales, service and support) via multiple, interconnected delivery channels.  Metagroep The infrastructure that enables the description of and increase in customer value, and the correct means by which to motivate valuable customers to remain loyal indeed, to buy again.
Prof. Sunitha Ratnakaram 1/26/2012

Few concepts
11

The cost of acquiring customers From customer acquisition to customer loyalty . To optimizing the customer experience

Prof. Sunitha Ratnakaram

1/26/2012

Few more
12

PRM (Partner RM) SRM (Supplier Relationship Management) mCRM (mobile CRM) xCRM (other letters preceding CRM)

Prof. Sunitha Ratnakaram

1/26/2012

General properties of relationships, networks and interaction

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Collaboration suppliers, customers, competitors and govt. agencies Longevity Commitment, dependency and importance Trust, risk and uncertainty Power Frequency, regularity and intensity Adaptation Attraction
Prof. Sunitha Ratnakaram 1/26/2012

Elements of CRM
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The four cornerstones of CRM

Customer

knowledge Relationship strategy Communication The individual value proposition

Prof. Sunitha Ratnakaram

1/26/2012

Customer knowledge
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Who is the customer? Customer profile

What

they purchased? How they want to be communicated?

Current and correct data bases Objective is to help customer better, timely and with appropriate solutions

Prof. Sunitha Ratnakaram

1/26/2012

Relationship strategy
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Tell and listen more than you sell Have broader and deeper interest in the right customers Completion of transaction is not the end of relationship Trust and commitment must grow

Prof. Sunitha Ratnakaram

1/26/2012

Communication
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Each customer feels that their communication experience was basic with supplier
Repetition

of information Strict procedures which become obstacle in problem solving even for simple problems Generally conversations are not spontaneous

Communication problem becomes obvious in multichannel communication system.

E.g.

A customer using mobile, internet, customer care and personal interaction for completing a transaction

Prof. Sunitha Ratnakaram

1/26/2012

The individual value proposition

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Know individual customer Develop a relationship with him/her Carry on dialogue Do not avoid individual proposition to each customer Firm may work on producing standard modules on large scale but assembling in flexible way Customized propositions increases complexity, as firm never likes to loose economies of scale But sometimes this may not give results

E.g. A retailers complex route planning for delivery vans

Prof. Sunitha Ratnakaram 1/26/2012

How to make it effective?

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Grow in all aspects step by step All are equally important One should not move ahead of others
yield will not materialize This may make top mgt. feel contrary of CRM and they may withdrew from implementation
Expected

Prof. Sunitha Ratnakaram

1/26/2012

CRM Capabilities for sales, marketing and service

20

CRM Capabilities for sales

In


personal selling process

Prospecting  Pre approach  Approach  Presentation  Handling objections  Closing  Follow up

In


general selling

Create customized solutions  Create unique feel for the customer

Prof. Sunitha Ratnakaram

1/26/2012

CRM Capabilities for marketing

21

Need recognition New product development Marketing communications Segmentation, Targeting and Positioning

Prof. Sunitha Ratnakaram

1/26/2012

CRM capabilities for services

22

After sales services Customer grievance handling Training customers on new products & periodic monitoring

Prof. Sunitha Ratnakaram

1/26/2012

Satisfy customers, shareholders, and deliver a measurable ROI

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Customers
Personalized solutions Effective grievance handling Services Improved service quality Reduction of customer stress Increased value for money Customer empowerment

Share holders

Increased EPS due to increase in customer loyalty, cross selling and up selling
Prof. Sunitha Ratnakaram 1/26/2012

Deliver a measurable ROI

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ROI could be tracked with customers and groups of customers to rework on relations if required

Case of Royal Bank of Canada

          

Its CRM journey began 6 years ago CRM is no longer a program for them but It is the core strategy Goal is to make each relationship profitable Before CRM revenues were growing at 10% and profits 10 15% annually After implementation of CRM revenue growth touched 15%, and profit growth near 25% For them CRM is a journey Every new investment is subject to the companys standard, capital allocation procedures Micro measurements like deposit rates, credit limits, direct mail response rates are closely watched Every new initiative is tested using a test group and control group before launching Top of the house metrics like revenue growth, profit growth, cost control etc. also are keenly focused on. If you are to succeed with CRM see it as strategy not as a tool.
Prof. Sunitha Ratnakaram 1/26/2012

Front and Back office

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Tasks in CRM systems

Primary


task consists in supporting or performing the activities involved in customer contact processes
E.g. exchange of information, placement of orders, invoicing, payment and provision of service etc.

Secondary

task is related to facilitating the primary

task


E.g. providing customer information and management information

A variety of sub systems work for the completion of the said tasks
Prof. Sunitha Ratnakaram 1/26/2012

Characteristics of front office and back office

26

Front office
Customer

data must be easily retrieved and modified E.g. within seconds insight may be gained into who the person is on the other end of the telephone line

Back office
Which

products customer has bought earlier Due to its difficulty a middleware also works to coordinate front office and back office.

Prof. Sunitha Ratnakaram

1/26/2012

Front office
27

The sales force automation or the sales information system that supports sales person or account manager during face-to-face contact The partner management system which is geared towards providing support to intermediaries in the joint approach to the end user market The call or contact centre, where incoming and out going traffic by telephone, fax and the Internet takes place The website The kiosks (points of information)

Prof. Sunitha Ratnakaram

1/26/2012

Middleware
28

The data warehouse or data mart, in which data originating from different sources are compiled to obtain a clear and better customer profile The campaign management system that produces the analysis, planning, execution and management of marketing communication campaigns The content management system which ensures that data from different sources may be published through different channels using a consistent design.
Prof. Sunitha Ratnakaram 1/26/2012

Back office
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This usually involves the legacy systems which are generally older and have a longer life span. These systems are designed for the management of transactions or products
E.g. separate systems where different insurances like health, motor and life insurances are maintained by companies Here batch processing of large quantities of similar orders only is intended Not suitable for real time processing of a large quantity of varied small orders

Prof. Sunitha Ratnakaram

1/26/2012

CRM process
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CRM process is defined as any group of action that is instrumental in the achievement of the output of an operating system, in accordance with a specified measure of effectiveness.

Prof. Sunitha Ratnakaram

1/26/2012

CRM process
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Prof. Sunitha Ratnakaram

1/26/2012

Benefits
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Ability to retain loyal and profitable customers and channels for rapid growth of the business project Acquiring the right customers, based on known characteristics, which drives growth and increased profit margins Increasing individual customer margins, while offering the right products at the right time.

Prof. Sunitha Ratnakaram

1/26/2012

Identify the goals of CRM

33

Increase in Customer Service Increasing Efficiency Aiding the Marketing Department

Questions
 What

to ask while establishing CRM goals:

are your main goals/objectives?  Who is your audience?  What is the best way to achieve CRM goals?  How will you accomplish your CRM goals?  How will you measure success?
Prof. Sunitha Ratnakaram 1/26/2012

Benefits of identifying goals of CRM

34

Establishing clear CRM goals is vital to any organization. After a clear view of this has been obtained going ahead with the CRM implementation will be infinitely easier and will result in reduced costs, efforts, time and no wastage of organization resources. Overall success is possible as the end objective is clearly defined and can be worked towards easily with employee cooperation.
Prof. Sunitha Ratnakaram 1/26/2012

Customer-centric business strategy and CRM process

35

CRM is a business strategy, so its more than a functional strategy. It affects organization as a whole
Marketing IT Service Logistics Finance Production HRM

and development

etc.
Prof. Sunitha Ratnakaram 1/26/2012

Continued.
36

The CRM strategy will have to provide direction to each department or employee that maintains contact with customers Customer-oriented approach of employees and managers should improve In practice, when it comes to CRM, many companies focus on increasing efficiency and reliability
Self service grants to customers like, tax filing, IRCTC, other travel and tourism bookings For these services to be more efficient perfect definition and control of all activities involved is required.

Prof. Sunitha Ratnakaram 1/26/2012

Continued ..
37

Focusing only on operational excellence would not make CRM as a strategic approach Goal of CRM is the development of long-term, mutually profitable customer-supplier relationships, where customer is given central position CRMs goal as business strategy is to increase customer intimacy

Prof. Sunitha Ratnakaram

1/26/2012