CRM Process

What is Customer Relationship Management (CRM)?

CRM is “the development and maintenance of mutually

beneficial long-term relationships with strategically
significant customers” (Buttle, 2000)

CRM is a comprehensive strategy and process of acquiring,

retaining and partnering with selective customers to create
superior value for the company and the customer.
Parvatiyar & Sheth (2001)
 What is Customer Relationship Management (CRM)? Contd….

A business philosophy :

• Based upon one-to-one marketing

• Supported by open lines of communication and feedback

• The buying and selling firms enter into a “learning

relationship”

• Platform to obtain a competitive advantage by embracing

customer
needs and building value-driven long-term relationships.

The value process is enhanced by use of IT

 Determinants of CRM

Trust
The willingness to rely on the ability, integrity, and motivation of
one company to serve the needs of the other company as agreed
upon implicitly and explicitly.

Value
The ability of a selling organisation to satisfy the needs of the
customer at a comparatively lower cost or higher benefit than
that offered by competitors and measured in monetary,
temporal, functional and psychological terms.
 Stages in the Development of a Key-Account Relationship

The Pre-relationship Stage: The event that triggers a buyer to seek a new business
partner.

The Early Stage: Experience is accumulated between the buyer and seller although a
great degree of uncertainty and distance exists.

The Development Stage: Increased levels of transactions lead to a higher degree of

commitment and the distance is reduced to a social exchange.

The Long-term Stage: Characterised by the companies’ mutual importance to each

other.

The Final Stage: The interaction between the companies becomes institutionalized.

High Synergistic KAM

Partnership TCS and
Degree of ministry of
involvement
Mid-KAM
external
Early-KAM P&G, WallMartaffairs
Low IBM, Fedex
Pre-KAM
Transactional Collaborative
Nature of customer relationship
(Millman and Wilson, 1995
Perspectives of CRM

Presentation
 Function of Customer Relationship
Management:
Value Creation Process
Technology delivery process
•R&D
•Technology integration
Management •Efficiency, effectiveness
Decision learning
Process
Value-based
Customer sensitivity Product delivery process Strategies
•Concept to launch •Pricing
•Diversity •Manufacturing process •Communication
•Information
•Differentiated
offering Customer delivery process
•Supply chain
•Distribution
•Infomediation (distribution
of information)
(Sharma et. al., 2001)
 Models of Customer Relationship
Management
The Evans and Luskin (1994) model for effective
Relationship Marketing

Relationship marketing
inputs
•Understanding customer
expectations
•Building service partnerships
•Empowering employees Relationship marketing outcomes
•Total quality management •Customer Satisfaction
•Customer loyalty
•Quality products
•Increased profitability

Assessment state
•Customer feedback
•Integration
 Models of Customer Relationship Management co

The Brock and Barcklay (1999) model of selling partner

relationship effectiveness

Independence

Mutual trust Selling partner

relationship
Cooperation effectiveness

Relative influence
 Summary

•CRM is a business philosophy based on trust and value;

•The core function of CRM is the value creation process;

•Customer relationships develop over time;

•The role of global salespeople in the process is that of both

relationship builders and relationship promoters;

•The basic premise of CRM : offer superior value to customers 

prospects into customers  customers into loyal customers  loyal
customers into partners.

•CRM is comprised of customers Relationships and Management and

not Databases, software, customer service, sales, etc

The foundation of effective CRM is built on an iterative

process of learning and customization.