Introduction to crm

Prateek Jain

CRM- An Introduction

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History of CRM

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• 1960 :– ERA OF MASS MARKETING

• 1970 :– SEGMENTATION AND

CUSTOMISATION

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1980 :NICHE MARKETING AND SFA

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1990 :RELATIONSHIP MARKETING, TELEMARKETING ANDCALL CENTERS

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Monopoly Market

• Single Seller• Seller’s Market• No Close Substitutes• Barriers to Entry• Firm and Industry are the same

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Bits and bytes

• CRM – the hottest buzz word in business today• Developing a personal and a professional profile about each

customer– Basic and historical information– Personal preferences– Trends and habits– Demographical information

• Building a CRM culture• The power of integration• Using emerging technology to get closer to the customer

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Current facts… A Reality Check

• Today customers are in charge – they make the rules• Putting technology at the center stage• Business intelligence is one of the most growing segment in the

marketplace• Customer loyalty is very difficult to maintain due to competition• Customers want an excellent service and they want to feel

special• Most companies think they are customer-focused however in reality they

are product-centric• There is a need to formulate customer-focused firms which needs:

– CRM strategy– Organizational change– Corporate culture

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Economics of customer retention

“Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.”

Rob Yanker, Partner, McKinsey & Company

10Understanding your customer is key to retention…..

Why CRM?

• It costs 6 times more to sell to a new customer than to sell to an existing one

• A typically dissatisfied customer will tell 8 to 10 people about his/her experience (mainly related to poor customer service)

• The odds of selling to a new customer is 15% versus 50% to an existing customer

• 70% of the customers complaining will do business againwith the company if the complaints are quickly addressed

• 90% of existing companies do not have integrated CRM toolsand platforms

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Customer Relationships Today

Product

Pricing

Community

Distribution

Communication

Branding

Customer Relationships

Building a customer-centric approach to Internet marketing by focusing on customers

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CRM Basics

• CRM is the timely delivery of excellent service“customer relationship management”

• CRM is a combination of business process and technology that seeks to understand a company’s customers from a number of perspectives including:– Who they are?– What they do?– What do they like?

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Age of the never-satisfied customer…

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• CRM becomes a support tool in a time characterized by:– Increased competition– Globalization– Growing cost of customer acquisition– High customer turnover

• CRM is all about creating a better value proposition to customers

• Information and communication technology is now acting as a catalyst for CRM– Extended enterprise– World wide web and the Internet

Defining CRM

• CRM is an integrated sales, marketing and service strategy that is based on a timely and accurate information infrastructure and that depends on coordinated enterprise- wide activities– Example: tracking customers interactions with the firm– Customer tracking includes steps in the selling and

customer service cycles• CRM steps include

– Targeting– Acquisition– Retention– Expansion

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Defining CRM

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• Targeting– Who do we target?– What segments are most profitable?– What segments match our value proposition?– What is the best segmentation strategy for us/our

industry?• Acquisition

– What is the best channel for each segment?– What is the acquisition cost for a

channel/segment?– Do certain channels deliver certain types of

customers?– Cost effective acquisition?

Defining CRM

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• Retention– How can we improve retention?– What is our average customer relationship length?– How can we hold customer for as long as possible?– What is the most cost effective method of retention?

• Expansion– How many products does our average customer buy?– How can we induce our current base to buy more products?– Who are the prime targets for expansion?– What is the cost of expansion?

Goals of CRM

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• Using existing relationship to grow revenue• Using integrated information for excellent

service• Introducing consistent, replicable channel

processes and procedures

CRM…

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• CRM is a business strategy and not a product• Putting CRM into practice requires developing a set

of integrated applications to address all aspects related to the front-office needs

• CRM could be a major support platform for small and medium-sized enterprises

• Cost of the information and communication technology applications and infrastructure should be calculated as opposed to the return-on-investment

CUSTOMER RELATIONSHIP MANAGEMENT

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• CRM enables an organization to:– Provide better customer service– Make call centers more efficient– Cross sell products more effectively– Help sales staff close deals faster– Simplify marketing and sales processes– Discover new customers– Increase customer revenues

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THE BENEFITS OF CRM

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• Firms can find their most valuable customers by using the RFM formula: recency, frequency, and monetary value

• Organizations MUST track:

– How recently a customer purchased items

– How frequently a customer purchased items

– The monetary value of each customer purchase

EVOLUTION OF CRM

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• There are three phases in the evolution of CRM:– Reporting– Analyzing– Predicting

• CRM Reporting Technologies help organizations identify their customers across other applications

• CRM Analysis Technologies help organizations segment their customers into categories such as best and worst customers

• CRM Predicting Technologies help organizations predict customer behavior, such as which customers are at risk of leaving

The Evolution of CRM

• Three phases in the evolution of CRM include reporting, analyzing, and predicting

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The Evolution of CRM

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CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS

• CRM success factors include:

1. Clearly communicate the CRM strategy.2. Define information needs and flows.3. Build an integrated view of the customer.4. Implement in iterations.5. Scalability for organizational growth.

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THANK - YOU

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