CUSTOMER RELATIONSHIP

Presented By: MANAGEMENT

IMC Presentation
Nikita Sanghvi
Bharat Maheshwari
Nirmal Gajjar
 AIRTEL – BILL PAYMENT

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CRM
CRM is “the development and maintenance of mutually beneficial
long-term relationships with strategically significant customers”
(Buttle, 2000)

CRM is “an IT enhanced value process, which identifies, develops,

integrates and focuses the various competencies of the firm to the
‘voice’ of the customer in order to deliver long-term superior
customer value, at a profit to well identified existing and potential
Customers
(Plakoyiannaki and Tzokas, 2001)

In short, CRM provides selling organisations with the platform

to obtain a competitive advantage by embracing customer needs
and building value-driven long-term relationships.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Acronyms for CRM
 Caring Relations Management
 Continuous Relations Management
 Creative Relations Management
 Customer Retention Management
 Customer Return Management
 Cost Reduction Management
 Cost & Return Management

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Six Steps of CRM Strategy
Calculate
Calculate the
the lifecycle
lifecycle life
life of
of your
your customers
customers

Rank
Rank or
or cluster
cluster them
them in
in accordance
accordance of
of cost,
cost, revenue,
revenue, profit
profit potential
potential &
& relationship
relationship intentions
intentions

Boldly
Boldly chose
chose the
the target
target customers
customers for
for the
the first
first wave
wave of
of CRM
CRM

Cover
Cover them
them with
with an
an IT
IT architecture
architecture to
to feed
feed their
their aspirations
aspirations

Approach
Approach them
them with
with a
a mix
mix of
of innovative
innovative products/services,
products/services, customer
customer care
care &
& growth
growth opportunities
opportunities

Keep
Keep updating
updating the
the customer
customer profile
profile

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Managing Customer Relationships
Qualifying prospects for relationship building

High
Use a non Build a strong
customized and lasting
approach relationship
Opportunities
For adding
value
Seek better Focus on
opportunities loyalty-building
elsewhere program
Low
Low Potential profitability of customer High

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Example - mCRM
 Marketing
A Finnish restaurant chain exploits the mobile medium in various marketing
related activities, such as sending SMS messages to loyal customers such
as invitations and information to the parties arranged only for loyal
customers. Other offerings could be coupons and free tickets.
This restaurant chain as well as sending offers from themselves, sends
offers which are provided by their partners. This could be movie tickets and
product discounts, based on customer preference
(Sinisalo & Karialuoto, 2006).
 Sales
A Finnish magazine, which is backed up by the internet provides ordering
from mobile mediums. After joining the loyalty program of the company, the
customer can order the products they want, by simply sending a SMS
including the product code. This way, the company can send mobile
marketing message to their loyal customers based on their preferences.
When receiving the advertising, the customer can reply to the message and
instantly order the offered product
(Sinisalo & Karialuoto, 2006).

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Example - mCRM
 Service
The first one to adopt a mobile phone service is Finnair – the
national airline of Finland (Sinisalo et. al. 2006). This
particular mobile service enables loyal customers to check-in
in advance for the scheduled international flights. This means
that passengers can go directly to the departure gate without
the need of waiting on the check-in line. The airline sends a
check-in proposal before departure and the customer replies
to check-in. The SMS will then works as a confirmation
message including the details of a flight. This will be stored on
the mobile phone and are accessible whenever needed;
which implies time saving and being easy to use.
(Sinisalo & Karialuoto, 2006).

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO - The Customer
Relationship Management Champion
 No. one retailing company in the United Kingdom (UK), since the mid-1990s.
 The case studies the loyalty card scheme launched by the company in 1995.
 It examines how the data generated through this scheme was used to modify
the company's marketing strategies and explores the role played by the
scheme in making Tesco the market leader.
 The case also takes a look at the various other ways in which Tesco tried to
offer its customers the best possible service.
 Finally, the company's future prospects are commented on in light of
changing market dynamics, the company's new strategic game plan, and
criticism of loyalty card schemes.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO
ISSUES:
 Examine how the information gathered through CRM tools can be
used to modify marketing strategies and the benefits that can be
reaped through them

 "Our mission is to earn and grow the lifetime loyalty of our customers."
 Sir Terry Leahy, Chief Executive Officer (Tesco), quoted in Tesco's 1998 Annual Report.

 "They (Tesco) know more than any firm I have ever dealt with how their
customers actually think, what will impress and upset them, and how they feel
about grocery shopping."
 Jim Barnes, Executive Vice President of Bristol Group, a Canada-based Marketing Communications and
Information firm, and a CRM expert.

 "The whole philosophy is in balancing the business in favor of the customer.

That comes down to a mixture of company culture and customer insight."
 - Crawford Davidson, Director (Clubcard Loyalty Program), Tesco.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO
 Every three months, millions of people in the United
Kingdom (UK) receive a magazine from the country's
number one retailing company, Tesco.
 These initiatives promote the store's products, introduce
promotional schemes and contain discount coupons.
However, what set Tesco apart from such run-of-the-mill
initiatives was the fact that it mass-customized these
magazines.
 Every magazine had a unique combination of articles,
advertisements related to Tesco's offerings, and third-
party advertisements.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO
 Tesco ensured that all its customers received magazines
that contained material suited to their lifestyles.
 The company had worked out a mechanism for
determining the advertisements and promotional
coupons that would go in each of the over 150,000
variants of the magazine.
 The loyalty card scheme laid the foundations of a CRM
framework that made Tesco post growth figures in an
industry that had been stagnating for a long time.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO
 The data collected through these cards formed the basis for formulating
strategies that offered customers personalized services in a cost-
effective manner.

 Each and every one of the over 8 million transactions made every week
at the company's stores was individually linked to customer-profile
information.

And each of these transactions had the potential to be used for

modifying the company's strategies. According to Tesco sources, the
company's CRM initiative was not limited to the loyalty card scheme; it
was more of a company wide philosophy.

Industry observers felt that Tesco's CRM initiatives enabled it to develop

highly focused marketing strategies...

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO
REAPING THE BENEFITS
 Commenting on the way the data generated was used,

sources at Dunnhumby said that the data allowed Tesco to

target individual customers (the rifle shot approach), instead
of targeting them as a group (the carpet bombing approach).

 Since the customers received coupons that matched their

buying patterns, over 20% of Tesco's coupons were
redeemed - as against the industry average of 0.5%.

 The number of loyal customers increased manifold since the

loyalty card scheme was launched,

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 1: TESCO
FROM CUSTOMER SERVICE TO CUSTOMER DELIGHT
 To sustain the growth achieved through the launch of

Clubcards, Tesco decided to adopt a four pronged approach:

◦ launch better, bigger stores on a frequent basis
◦ offer competitive prices (e.g. offering everyday low prices in the
staples business)
◦ increase the number of products offered in the Value range
◦ focus on remote shopping services (this included the online
shopping venture).
 To make sure that its prices were the lowest among all

retailers, Tesco employed a dedicated team of employees,

called 'price checkers.’

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 2: Marrying CRM to a
New Definition of Loyalty
Building customer loyalty requires an understanding of your business's unique
needs.
 One company that has had to uniquely build loyalty is Bella Pictures, a

wedding photography company that doesn’t seek repeat customers.

 “We are building loyalty, not from one bride saying ‘I’m going to use Bella again

and again.’ We hope they only have one wedding photographer. But former
customers, their family and their friends will spread the word that Bella delivers
on its promise,” Bella Pictures co-founder and chairman Tom Kramer said.
 During its five years in business, Bella Pictures has had to build loyalty the

hard way — by focusing on customer satisfaction that can engender a strong

referral business.
 Using Salesforce.com Inc.’s Enterprise Edition to store a database of clients,

the company has achieved its goals.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 2: Bella Pictures
SERVICE
 The Bella Pictures customer service experience begins

when a bride-to-be contacts the company, either by

phone or online, to give details about her wedding.
 For every customer a profile is made and entered into

Bella’s CRM system.

 The details range from the type of wedding it will be — a

garden, church or beach wedding, for example — to

which relative or group pictures to take and whether
doves will fly at the reception.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 2: Bella Pictures
 During the selection process, the bride will go onto
Bella’s Web site, enter information and begin selecting
pictures from other weddings. Based on those
selections, Bella generates a profile of the kinds of
photography the bride is looking for and matches her
with the appropriate photographer
 The San Francisco-based company has 30 branches
across the country, and depends on the information in its
CRM system to match brides with the appropriate
freelance photographers.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 2: Bella Pictures
 Once the photographer shoots the wedding, he or she will send
all the digital images to the company’s headquarters. The pictures
are then uploaded on a Web site and an album is sent to the
bride electronically for her approval before a printed album is
shipped.

 “Aside from the day the pictures are taken, there is very little
interaction between the individuals involved, and that is why the
system is so important to us,” Kramer said. “If you don’t have all
the details, if you don’t make sure that your system reminds you
to send the emails on the dates that you are supposed to or meet
your commitments, then that trust level goes down,” Kramer said.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 2: Bella Pictures
 Nevertheless, Kramer noted that 30 percent of his business
comes from referrals from former clients who tell their
relatives and friends about Bella Pictures.

Since Bella Pictures does not depend on repeat customers,

Sarner said the company has come up with its own definition
of what CRM and loyalty mean. “Loyalty is a feeling. Loyalty
is a long-term opportunity to do business with a company and
in this case Bella Pictures is creating a long-term business by
creating influencers to help them connect with other people.
That’s a working definition of loyalty,” Sarner said.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

CASE STUDY 2: Bella Pictures
 “We’ve recently built a photo hosting site which allows us
to invite family and friends to the Web site where they
can find pictures of themselves and get copies for a fee,”
Kramer said. “We are expanding the relationship to the
bridal party, family and friends. That’s the kind of loyalty
we are building into our brand,” Kramer said.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

INDAIN RETAIL MARKET STRATEGIES
 STRATEGIES

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Causes of Failure to Achieve CRM
Benefits
2% 1% 4%

4%

6%
29%

Organisational Change
Company Policies & Inertia
Lack of CRM understanding
12% Poor Planning
Lack of CRM skills
Budget Problem
Software Problem
Bad Advice
Others

20%
22%

Source: A master thesis on feasibility study of application & implication of CRM in Hotel Industry

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

Summary

 CRM is a new business philosophy based on trust and value;

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

 Customer relationships develop over time;

 The basic premise of CRM is to offer superior value to

customers in an effort to turn prospects into customers, customers
into loyal customers, and loyal customers into partners.

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011

 THANK YOU

CRM STEVENS BUSINESS SCHOOL Batch 2009-2011