Overview of CRM

APresentation on

Module V: Issues and Challenges in Implementation of CRM

Prepared byNilesh Sen Manohar Rathore Riddhi Mehta Jesal Kothari Jaydeep Budheliya Shekher Nirmal Amod Hardikar

Submitted to

Prof. Neelam Kshatriya

Topics Covered

Overview of Retail

CRM Implementation Road Map

CRM Roadblocks (4P’s)

Emerging trends in CRM

Evaluating customer retention plan

Learning from customer defections

Phased development

Flow of Presentation

Retail

“Rural or Urban, Old OR Young, Malls OR Kirana Shops & So on— People from every Nook & Corner needs everything which is available @ Retail Store.”

OVERVIEw

5th Largest in the world.

Entry of MNC—Walmart,Carrefour,Costco

Major Players—Reliance, Tata, Aditya Birla Group, K Raheja Group.

Accounts 12% of GDP

Organized retail (8%)

Traditional to Shopping Malls

1995

•Emerging

2003

•Growth

2006

•Retail Boom

2007

•Managing it’s NO.1 Position

2008

•High Retail GOLD Rush

2010

•Continued Growth

•

Phased Growth of Indian Retail Market

Advantages of CRM for Retailers

Customer Retention

and Loyalty

Business Performance

Visibility

MicroMarketing

Improved Employee

Productivity

Customer Satisfaction

High Customer

Profitability

Reduced Cost of Sales

Low cost of retaining

old customers

Top 10 Indian Retailer

Rank Company

1 Wall mart

2 Kroger

3 Target

4 Wal Green

5 Costco

6 The home depot

7 CVS caremark

8 Lowe’s

9 Bestbuy

10 Safeway

Top 10 Global Retailer

Top 10 Retailers to work for(According to Forbes)

Rank Company

1 REI

2 IKEA

3 Costco

4 Nordstrom

5 J Crew

6 The Gap

7 American Eagle outfitter

8 Anthropologies

9 H & M

10 DSW

Delhi

GoaAhmedabad

Maharashtra

Evaluating Customer Retention Plan

Definition of Customer Retention

• Customer Retention is the activity that a selling organization undertakes in order to reduce customer defections.

Facts about CR

Cost of acquiring

a new customer

Leaky Bucket Theory

CRM is part of

CR

Customer complaint

Customer satisfaction V/S

CR

Why Customer switch?

Lessening the

Defection rate

Advantages of CR

Zero Customer Defection

Customer churn

MinimisedCustomer

delight

Improve profitability

Customer Retention

plans

Customer retention is increasingly becoming more and more important .

Most firms offer loyal customer rewards for their loyalty.

Customer portfolio analysis, customer retaining mareting mix, reorganisation for

Customer retention.

However many rewards program are misunderstood and often wrongly applied.

Customer Portfolio Analysis

Optimal balance in customer portfolio

Reduce defector by

10%

Design of a portfolio

Purchasing history

Portfolio segment

Customer Categories

Actual Sales (2012)

Target sales (2013)

First time customers

28% 25%

Repeat Customer 40% 60%

Switched away, then returned

10% 5%

Last time (Defectors)

22% 10%

Total 100% 100%

Contd…..

Reorganisation for Customer Retention

Lack of Organisational Control & Coordination

Lack of Sensitivity

Insufficient linkage between

marketing & Operation

High Customer

expectation

Realistic target

turnover rates

Customer Retaining Marketing Mix

Product extras

Specialised Distribution

Post – Purchase

Communication

Reinforcing Promotions Sales force

connections

Customer Loyalty Programmes

Capturing customers

Rewards

Educating the

Customers

Companies are

adopting it

Evaluating Retention Programmes

Targeting the right

customers

Value Provided

Measuring increase in

Loyalty

Shehker

CRMImplementation Road Map

Implementation Road Map

A CRM Roadmap is a strategic plan that identifies how an organization can meet and exceed its customers' needs. This includes, but is not limited to, assessing how the sales, marketing and service entities work together to:

1. gain insight from their customers (e.g. purchase history, desired products/services),

2. produce valuable offerings/products (e.g. personalized product) and

3. provide the ultimate customer experience (e.g. multiple touchpoints, 360 degree view of the customer).

So how do organizations know which CRM capabilities they have, and which they need to realize their strategic goal?

Now we will see primary steps (which have been used cross-industry, including financial services, electronics and high-tech, consumer products, manufacturing, etc.) to follow when developing a CRM Roadmap.

CRM Road Map…How?

The “sponsor” for a CRM Roadmap effort must have a vested interest in the project and ideally has P&L responsibility for the group to be impacted.

As with any project an organization undertakes that involves significant change to business processes, organizational structures, or roles and responsibilities, the lack of key, influential sponsorship reduces the effectiveness of the project, since there is no driving force for implementation.`

Step 1: Gain Senior Level Sponsorship

It is critical to gain insights of various key stakeholders and decision-makers within the organization.

Examples of questions that help gauge the health of the client's CRM include:

• How would you define CRM?• What types of customer information is

captured/tracked (acquisition/retention costs, churn, cost to serve, etc.)?

• What information would you like to know about your customers that you currently do not?

Done by interviewing Executives, Managers, Marketers, Front line staff…

Step 2: Gather Information

Through these meetings, we gain an understanding of the client's current CRM capabilities and significant opportunities to improve their customer relationships, and map out findings.

Also important to understand company's future direction (usually between 6 months and 2 years).

Then comparison of current state of CRM against best practices within the companies respective industry.

Step 3: Assess Current state and Define Future state Gaps

Value opportunities represent the potential benefits delivered by being more customer-centric.

Identify and categorize value opportunities along the lines of people, process and technology.

Example of a "process" value opportunity is improving data capture for all customer contacts across sales functions and touch points (e.g. phone, e-mail, etc.).

"People" value opportunities may involve additional training on service procedures for capturing customer data.

"Technology" value opportunities might include developing a data warehouse.

Step 4: Identify Value Opportunities

After determination of where the value opportunities lie. Identification of which strategic CRM capabilities are needed.Below is a sample of link between a specific value opportunity and its corresponding strategic CRM capabilities:

Value Opportunity :• Improve customer understanding

Strategic CRM Capability:• Possess good knowledge of the customer• Leverage customer information from the service

process• Understand customer profitability and cost-to-

serve.

Step 5: Link Value Opportunities to strategic CRM Capabilities

Once value opportunities are prioritized, specific CRM projects need to be developed. Defining and executing CRM projects will ensure the company masters the relevant strategic CRM capabilities.

An effective way to define relevant projects is through brainstorming sessions with the client. Samples of the outcome of a session might include:

• Understand customer profitability• Enhance call center operations by

implementing sophisticated touch-point technologies

• Establish a data warehouse• Improve sales force training

Step 6: Define CRM Projects and Requirements

Once the projects and requirements are defined, it is necessary to develop the business case to support or refute the criticality of a specific project. The business case seeks to justify the money investment needed and the ROI. Each business case should include:

• Details and costs of required resources (people, technology, training, outsourced resources, etc.),

• Projected duration of time of each project.• Potential benefits

For example, a typical CRM investment ranges from $10 to $25 million (or more) over a three to five year period. The amount is wholly dependent upon how many initiatives have been identified and how extensive those initiatives are. Examples:

• Marketing Insight initiative • Sales force automation initiatives

Step 7: Develop Business Case

Developing a roll-out strategy enables organizations to focus their resources, money and time on the most important projects that help them become customer driven.

Prioritization and phasing of projects is conducted with the executive team, a process in which they evaluate the results of the business cases, and consider for each project's financial results, duration, level of effort required, and technical impact.

Critical Success Factors

Step 8: Develop a Roll-out strategy

Achieving success in developing intimate and enduring relationships with customers begins with a holistic consideration of an organization's functions and abilities that affect its consumer's objectives.

Developing a CRM Roadmap therefore, is a continuous process and not just a one-time exercise, because customers' needs and preferences change constantly.

The correct strategy can help your organization form deeper relationships with its consumers, and also obtain a competitive advantage in the marketplace.

A Final Thought...

Amod

Emerging Trends in CRM

1. Near-field Communication 2. Location-based Services 3. Augmented Reality 4. Social Media on Mobile & Social Media as

Customer Service Channel5. Next Generation Mobile Apps

Riddhi

4Ps of CRM Roadblocks

• Process• Perception• Privacy• Politics

Process

• Companies are slow/unwilling to modify business process to support both customer relationship comfort zone of staff OR customer old way of doing things,tentative responsibilities etc.--Sleepary Scope.

Perception

• CRM must be viewed as job enabler not as latest in the series of doctrine to be implemented corporate policies.

• People are made to believe that they should be able to accomplice the test in less time and purpose new task as well.

Privacy

• Understand the quid procque are more lokely to share their personal informationwith the company if they

Politics

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