Innovations in Rural Marketing

Redefining CRM

Innovations in Rural Marketing Redefining CRM

Are innovative CRM strategies adopted by corporates an ideal solution for retaining and expanding consumer base?

Evolution of Relationship
Pure Transaction Repeated Transactions/Relationship Long Term Buyer-Seller Relationship Strategic Partnership Strategic Alliance & Jt. Venture and Networking Organizations

Innovations in Rural Marketing & Redefining CRM

Rural Market - Sturdy Nokia 1100, advertised as dustresistant, doubles as a torch

Innovations in Rural Marketing & Redefining CRM

Innovation - Sachet Marketing

Redefining CRM
Customer relationship management (CRM) is the process of managing the detailed information about individual customers and carefully managing all the customer touch points with the aim of maximizing customer loyalty. CRM is a broad term that covers concepts used by organizations to manage their relationships with customers, including collecting, storing and analyzing customer information.

Redefining CRM
There are three aspects of CRM, each of which can be implemented in isolation: Operational CRM: The automation or support of customer processes involving sales or service representatives Collaborative CRM: Direct communication with customers not involving sales or service representatives (self service) Analytical CRM: The analysis of customer data for a broad range of purposes

Redefining CRM
Operational CRM Operational CRM provides support to front office " business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database as necessary. Focus on customers' value is key to a successful CRM strategy. Different customers have to be treated differently. Variables like customers' ranking, actual value and potential value are strategy drivers.

Redefining CRM
Collaborative CRM Collaborative CRM covers the direct interaction with customers. This can include a variety of channels, such as internet, email, or automated phone answering system. It can generally be equated with self service. The objectives of Collaborative CRM can be broad, including cost reduction and service improvements.

Redefining CRM
Analytical CRM Analytical CRM analyzes customer data for a variety of purposes, including: design and execution of targeted marketing campaigns to optimize marketing effectiveness design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention analysis of customer behavior to aid product and service decision making (eg pricing, new product development, etc) management decisions, e.g. financial forecasting and customer profitability analysis risk assessment and fraud detular for credit card transactions Analytical CRM generally makes heavy use of predictive analytics

Redefining CRM
The technology requirements of a CRM strategy can be very complex and far reaching. The basic building blocks include: A database to store customer information. This can be a CRM specific database or an enterprise data warehouse. Operational CRM requires customer agent support software. Collaborative CRM requires customer interaction systems, eg an interactive website, automated phone systems etc. Analytical CRM requires statistical analysis software, as well as software that manages any specific marketing campaigns. Support CRM systems require interactive chat software to provide live help and support to web site visitors.

Redefining CRM
Marketing Investment Pyramid

Platinum Gold Iron Lead Profit Tiers

Allocating Marketing Resources

Redefining CRM
Privacy and Data Security The data gathered as part of CRM must consider customer privacy and data security. Customers want the assurance that their data is not shared with 3rd parties without their consent and not accessed illegally by 3rd parties. Customers also want their data used by companies to provide a benefit for them. For instance, an increase in unsolicited telemarketing calls is generally resented by customers while a small number of relevant offers is generally appreciated.

Redefining CRM
Customer relationship management software:
Customer relationship management software is defined as business management and automation of the front-office divisions of an organization. CRM software is essentially meant to address the needs of Marketing, Sales and Distribution, and Customer Service and Support divisions within an organization and allow the three to share data on prospects, customers, partners, competitors and employees. The purpose of CRM software is to manage the customer through the entire lifecycle, i.e. from prospect to qualified opportunity to order to up selling and cross selling to exit.

Redefining CRM
CRM software automates many of the needs of Marketing, Sales and Support users, such as Telephony, or the ability to conduct phone calls and manage call data, and tools to capture, share and manage automated alerts on lead data as it passes through the sales pipeline. CRM software provides a standard framework for pushing leads through a sales pipeline and managing it amongst many stakeholders in real time, in order to provide better customer relations and grow revenues by creating more sales, and losing fewer customers.

Redefining CRM
From CRM to CVM
Customer Value Management Customer lifetime value (CLV), Lifetime customer value (LCV), or Lifetime value (LTV) is a metric that projects the value of a customer over the entire history of that customer's relationship with a company. Use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales.

Redefining CRM
Calculating customer lifetime value Intuitive appeal: because in theory it allows companies to know exactly how much each customer is worth in rupee terms, and therefore, exactly how much a marketing department should be willing to spend to acquire each customer. In reality, however, it is often difficult to make such calculations due to the complexity of the calculations and lack of reliable input data, or both. Calculation of CLV: depends on the nature of the customer relationship for example; Companies with a monthly billing cycle, such as mobile phone operators, can count on a reasonably reliable stream of recurring revenue (ARPU) from each customer. Car manufacturers, on the other hand, have less insight into when or whether a customer will make a repeat purchase.

Redefining CRM
Data inputs commonly used when making customer lifetime value calculations are:
Acquisition cost Churn rate Discount rate Retention cost Time period Periodic Revenue Profit Margin

Redefining CRM Acquisition cost The amount of money a marketing department has to spend, on average, to acquire a single new customer. Churn rate The percentage of customers who end their relationship with a company in a given time period. Churn rate typically applies to subscription services, such as longdistance phone service or magazines.

Redefining CRM
Discount rate The cost of capital used to discount future revenue from a customer. Discounting is an advanced topic that is frequently ignored in customer lifetime value calculations. The current interest rate is sometimes used as a simple (but incorrect) proxy for discount rate. Retention cost The amount of money a company has to spend in a given time period to retain an existing customer. Retention costs include customer support, billing, promotional incentives, etc.

Redefining CRM
Time period The unit of time into which a customer relationship is divided for analysis. A year is the most commonly used time period. Customer lifetime value is a multi period calculation, usually stretching 3-7 years into the future. In practice, analysis beyond this point is viewed as too speculative to be reliable. Periodic Revenue The amount of revenue collected from a customer in the time period.

Redefining CRM
Profit Margin Profit as a percentage of revenue. Depending on circumstances this may be reflected as a percentage of gross or net profit. For incremental marketing that does not incur any incremental overhead that would be allocated against profit, gross profit margins are acceptable.

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