What is CRM?

• CRM is a systematic approach towards using

information and on going dialogue to built long
lasting mutually beneficial customer relationship

• Entails all aspects of interaction a company has with

its customer, whether it is sales or service related

• It starts with the foundation of relationship

marketing
Changing focus of organisations
 Why focus on CRM?
• Major businesses focus towards :
– endowing value addition to the sales cycle,
– and customer retention rather than constructing a new
customer base

• Company's relationship with the customer would be

the biggest asset in the long run.
 Need
• Change from the profit orientation of a business to
customer centric unit

• Businesses today not just a hub of wealth creation

• Impossible for a business to survive, without being

focused upon the needs and expectations of the
customers.
 Is CRM New?

No! Yes!
• Simply an extension of • A shift in corporate
relationship marketing philosophy concerning the
approach to value delivery
• Builds on customer
• Customer-centric
service and satisfaction approach to value chain
concepts • New and technology-
• Just the latest buzzword enhanced processes
for creating customer • Focus is not just on
orientation bottom-line, but on top-
• Bottom-line is still the line
same • Goal is to create satisfying
experiences across all
customer contact points
 Distinctions in Customerization
Mass Marketing Customerization
Relationship Customer is passive Customer is active co-
with customers participant in process producer,
Customer needs Researched and May not be articulated
articulated
Product and service Marketing and R&D Customized based on
offering drive offering customer interactions
Price Fixed prices with Value based pricing;
discounting customer determined
Communication Advertising and PR Integrated, interactive

Distribution Mix of direct and Direct (online)

indirect
 Making CRM Happen
• Evaluate products and processes customers’ terms.
• Analyze the multiple channels through which the company
interacts with customers.
• Examine how the company understands its customers.
Does it keep good data? How does it get that data? Does
information flow between functional areas?
• Provide fingertip access to all information.
• Analyze human resources and ensure that everyone has an
understanding of philosophy of CRM
 Advantages of CRM

• By using CRM methodology, an enterprise can:

– Provide better customer service
– Increase customer revenues
– Discover new customers
– Cross sell/Up Sell products more effectively
– Help sales staff close deals faster
– Make call centers more efficient
– Simplify marketing and sales processes
 The Types of data, CRM software collects

• Responses to campaigns
• Sales and purchase data
• Account information
• Web registration data
• Service and support records
• Demographic data
 Why CRM?

• Highly competitive marketplace 

The emerging channels have transmitted the marketplace into
a fierce battle field
• The new empowered e-customer 
The customer is now well aware of the market opportunities,
through Internet & other sources
• Ever changing technology 
New technologies provide a way to provide personalized
solution at individual level
• Making business sense 
Companies that provide customers with what they want, take
share of wallet from those who don't
 A survey

• The cost to sell to a new customer is six times greater as compared to an

existing customer
• A disappointed customer will notify 8-10 people
• With an increase of 5% customer retention rate, profits could increase by
85%
• Probability of selling to fresh customers = 15%, as judged against for
existing customers which amounts to 50%
• 70% of the complaining customers will remain faithful if problem is
resolved
• 90% of companies do not have the sales and service integration to support
e-commerce
• These are enough reasons for any small or big organization to have a
customer orientation and go in for solutions which help them achieve this
objective.
parameters where a CRM can help an organization
are
• Intent 
Creating the base upon which the customer relationship would be managed and turned to
value proposition.
• Tactic 
To focus and work upon turning the customer base into an asset for the business entity.
• Value satisfaction 
Ensuring that the customers are endowed with the value satisfaction they have visualized, it
is to reduce the dissonance amongst the prospective long term customers
• Organizational change 
With the changing business environment and multi cultural aspects, businesses require a
distinct approach towards the customers as well as the employees.
• Procedure 
Merely streamlining the internal processes would do no wonders to an organization, a
holistic approach would work towards creating and maintaining customers for life long.
• Update 
Unanimously, data recording is a great aspect of every CRM suit which makes it perfect blend
of information and facilitation.
 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.
Determinants of CRM

In addition to trust and value, salespeople must:

Understand customer needs and problems;

Meet their commitments;

Provide superior after sales support;

Make sure that the customer is always told the truth

(must be honest); and

Have a passionate interest in establishing and retaining a long-

term relationship (e.g., have long-term perspective).
• Stages in the development of a Customer 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.
Chapter 15: Customer Relationship Management (CRM)

Stages in the Development of a Key-Account Relationship

High
Synergistic KAM

Partnership
Degree of
involvement Mid-KAM

Early-KAM

Low Pre-KAM

Transactional Collaborative
Nature of customer relationship
(Millman and Wilson, 1995)
 A Relationship Life Cycle Model

High cooperation
Low competition Pre- Development Maturity Decline
relationship stage stage stage
stage

Low cooperation
High competition

Time
Functions of Customer Relationship Management

Direct functions (are the basic requirements of a company that are

necessary to survive in the competitive marketplace)
Profit;
Volume; and
Safeguard

Indirect functions (are the actions necessary to convince the

customer to participate in various marketing activities).
Innovation:
Market;
Scout: and
Access.
Chapter 15: Customer Relationship Management (CRM)

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 role of global salespeople in the process is that of both

relationship builders and relationship promoters; and

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.
Chapter 15: Customer Relationship Management (CRM)

The role of salespeople as relationship builders and promoters

Salespeople by:

identifying potential customers and their needs;

approaching key decision makers in the buying firm;
negotiating and advancing dialogue and mutual trust;
coordinating the cooperation between the customers and
their company;
encouraging the inter-organisational learning process;
contributing to constructive resolution of existing conflicts; and
leading the customer relationship development team

are the individuals in any organisation who act both as relationship

builders and as relationship promoters.
 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
•Total quality management
Relationship marketing outcomes
•Customer Satisfaction
•Customer loyalty
•Quality products
•Increased profitability

Assessment state
•Customer feedback
•Integration
(Evans and Luskin, 1994)
 Managing Customer Relationships

The global salesperson must be involved in the following activities in order to initiate,
develop and enhance the process that is aimed at building trust and commitment with the
customer.

Initiating the relationship

Engage in strategic prospecting and qualifying;

Gather and study pre-call information;
Identify buying influences;
Plan the initial sales call;
Demonstrate an understanding of the customer’s needs;
Identify opportunities to build a relationship; and
Illustrate the value of a relationship with the customer
Chapter 15: Customer Relationship Management (CRM)
Managing Customer Relationships

The global salesperson must be involved in the following activities in order to initiate,
develop and enhance the process that is aimed at building trust and commitment with the
customer.

Developing the relationship

Select an appropriate offering;

Customise the relationship;
Link the solutions with the customer’s needs;
Discuss customer concerns;
Summarize the solution to confirm benefits; and
Secure commitment.
 Managing Customer Relationships

The global salesperson must be involved in the following activities in order to initiate,
develop and enhance the process that is aimed at building trust and commitment with the
customer.

Enhancing the relationship

Assess customer satisfaction;

Take action to ensure satisfaction;
Maintain open, two-way communication; and
Work to add value and enhance mutual opportunities.