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College

Customer Relationship Management Project

INTRODUCTION
Definition of customer
Inhofe defines customer as:

"A party who is involved with the acquisition of the companies' goods and services and who is of interest to the organization." (Inhofe et al, 2001)
In this definition, customers can be either individuals or organizations. Customers can also be loose group of individuals joined together as a membership organization, such as the Civil Aviation Authority (CAA) in UK. They also list some customer types according to their definition, such as:

Agent Beneficiary Bill payer Customer Competitor Employee Guarantor Household Prospect Supplier

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Definition of CRM
(Customer Relationship Management)
Customer implemented relationship strategy for management managing a (CRM) is companys a widely-

interactions

with customers, clients and sales prospects. It involves using technology to organize, automate, and but synchronize also those business processes

principally sales activities,

for marketing, customer

service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company-wide business strategy including customerinterface departments as well as other departments. First of all, it must be understood that at its core, CRM is more than just a set of technologies: it is a process. This fact will be of significant importance to Information Technology (IT) professionals who will be asked to support CRM with information and applications. Furthermore, it is intended to be a repeatable process to ensure ongoing, continually improving, and consistent results. Simply stated, CRM comprises the acquisition and deployment of knowledge about customers to enable an airline to sell more of their product and service more efficiently (Flanagan and Sadie, 1998).

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Providing customers with a good experience however and whenever they choose to contact you is a key part of managing relationships with them. Ovum defines customer relationship

management (or CRM) as:

A management approach that enables organizations to identify, attract and increase retention of profitable customers, by managing relationships with them. (Bradshaw, 2000).
This definition deliberately makes no mention of any particular means of communication, or channels, whether 'traditional' (mail, telephone, in person) or new (email, Web, wireless devices, interactive television). It also makes no mention of process management technology; while implementing CRM is certain to involve the deployment of new technologies, it requires a re-examination of business processes, which should lead technology decisions, and not vice versa. The principles of CRM apply equally, regardless of the channel to the customer. However, the first wave of CRM, which came to prominence in 1998, centered on 'traditional' channels - supporting front-office personnel communicating mainly by telephone, but also by fax and mail, as well as field personnel.

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Phases of CRM
The three phases in which CRM support the relationship between a business and its customers are to:

Acquire: CRM can help a business acquire new customers through contact management, selling, and fulfillment.

Enhance: web-enabled CRM combined with customer service tools offers customers service from a team of sales and service specialists, which offers customers the convenience of one-stop shopping.

Retain: CRM software and databases enable a business to identify and reward its loyal customers and further develop its targeted marketing and relationship marketing initiatives.

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Different levels of CRM


In defining the scope of CRM, three different levels can be distinguished:

Foundational services Value-added services

Customer-centered services

Foundational services:
This includes the minimum necessary services such as web site effectiveness and responsiveness as well as order fulfillment.

Customer-centered services:
These services include order tracking, product configuration and customization as well as security/trust.

Value-added services:
These are extra services such as online auctions and online

training and education. Self-services are becoming increasingly important in CRM activities. The rise of the Internet and CRM has boosted the options for self-service activities. A critical success factor is the integration of such activities into traditional channels. An example was Fords plan to sell cars directly to customers via its Web Site,
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which provoked an outcry among its dealers network. CRM activities are mainly of two different types. Reactive service is where the customer has a problem and contacts the company. Proactive service is where the manager has decided not to wait for the customer to contact the firm, but to be aggressive a contact the customer himself in order to establish a dialogue and solve problems.

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Types/ Variations of CRM


Sales force automation
Sales force automation (SFA) involves using software to streamline all phases of the sales process, minimizing the time that sales representatives need to spend on each phase. This allows sales representatives to pursue more clients in a shorter amount of time than would otherwise be possible. At the heart of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective client, from initial contact to final disposition. Many SFA applications also include insights into opportunities, territories, sales forecasts and workflow automation, quote generation, and product knowledge. Modules for Web 2.0 ecommerce and pricing are new, emerging interests in SFA.

Marketing
CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, telephone and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. This has been superseded by marketing automation and Prospect Relationship
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Management (PRM) solutions which track customer behaviour and nurture them from first contact to sale, often cutting out the active sales process altogether.

Customer service and support


Recognizing that service is an important factor in attracting and retaining customers, organizations are increasingly turning to technology to help them improve their clients experience while aiming to increase efficiency and minimize costs. Even so, a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems. . The core for these applications has been and still is comprehensive call center solutions, including such features as intelligent call routing, computer telephone integration (CTI), and escalation capabilities.

Integrated/Collaborative
Departments within enterprises especially large enterprises tend to function with little collaboration. More recently, the development and adoption of these tools and services have fostered greater fluidity and cooperation among sales, service, and marketing. This finds expression in the concept of collaborative systems which uses technology to build bridges between departments. For example,
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feedback from a technical support center can enlighten marketers about specific services and product features clients are asking for. Reps, in their turn, want to be able to pursue these opportunities without the burden of re-entering records and contact data into a separate SFA system.

Small business
For small business, basic client service can be accomplished by a contact manager system: an integrated solution that lets organizations and individuals efficiently track and record interactions, including emails, documents, jobs, faxes, scheduling, and more. These tools usually focus on accounts rather than on individual contacts. They also generally include opportunity insight for tracking sales pipelines plus added functionality for marketing and service. As with larger enterprises, small businesses are finding value in online solutions, especially for mobile and telecommuting workers.

Non-profit and membership-based


Systems for non-profit and membership-based organizations help track constituents and their involvement in the organization. Capabilities typically include tracking the following: fund-raising,

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demographics, membership levels, membership directories, volunteering and communications with individuals. Many include tools for identifying potential donors based on previous donations and participation. In light of the growth of social networking tools, there may be some overlap between social/community driven tools and non-profit/membership tools.

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Marketing Features of CRM


To use an effective CRM for marketing scope, a suitable application is required to support Service and Sales modules and the following features.

Automated marketing process: It offers an adaptive rules engine covering different aspect of

marketing such as: targets, opportunities, and orders, which can be used to streamline the creation, management, execution, and tracking of marketing processes in an organization.

Campaign management: Its functionality allows automation of the flow of campaigns. Also

it defines and plans the use of workflow, customer profiling and segmentation, personalization of content. Also offers facilities such as scheduling of events and mailing lists, response management, and analysis tools.

Graphic Workflow: This application captures the logic of the campaign and enables

the user to define, schedule, run, and manage campaigns. Also it allows businesses to conduct a variety of campaigns such as loyalty programs, seasonal offers, sweepstakes, cross-sell, up-sell, product launches,
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partner and channel schemes, trade show registration, newsletters, and so forth.

Customer

Profiling,

Segmenting,

and

Targeting: Customers can be profiled, segmented, and targeted in base of its demographic and psychographic information available on the database. This information should allow the creation of static or dynamic mailing lists that are used in a complex and advanced query builder. While static lists are suited for targeting niche segments, dynamic lists are used to target segments that need frequent updating.

Scheduling Events and Mailing Lists: Scheduling events using the wait function based on date and time

elapsed is another valuable feature to look for in CRM technology. It can also be used to schedule mailing lists to participate in campaigns at predetermined intervals.

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Objectives of CRM

Following are objectives of CRM: Reduce costs of marketing Improve accuracy and relevancy of recommendations, customer satisfaction, conversion rate, i.e., Turn browsers into buyers. Increase customer retention, frequency, order size and customer response. Provide competitiveness through differentiation. Increase profitability hence ROI.

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Why do customers leave?

68% upset with the treatment theyve received 14% dissatisfied with product or service 9% begin doing business with the competition 5% seek alternatives or develop other business relationships 3% move away 1% die

Customer loyalty and the lifetime value of a customer can be worth up to ten times as much as the price of a single purchase. For every complaint a business receives, there are approximately 26 other customers with unresolved complaints or problems. A dissatisfied customer will tell up to ten people about his/her experience. Thirteen percent of those unhappy customers will tell up to 20 people!

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E- Commerce
Electronic commerce, consists commonly of the known buying and as eselling

commerce or ecommerce,

of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain

management, Internet processing, electronic

marketing, online data

transaction

interchange (EDI), inventory

management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as etailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web.

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Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, prequalified participants (private electronic market). Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such

as Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly online to the seller's computer usually via the internet. There is no intermediary service. The sale and purchase transaction is completed electronically and interactively in real-time such as Amazon.com for new books. If an intermediary is present, then the sale and purchase transaction is called electronic commerce such as eBay.com. Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions.

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HISTORY OF E- Commerce
Originally, electronic commerce was identified as the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices

electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK. From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data

mining and data warehousing. In 1990, Tim Berners-Lee invented the Worldwide Web web

browser and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet was strictly prohibited until 1991. Although the Internet became popular worldwide around 1994 when the first internet online shopping started, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By the end of 2000, many European
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and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services. In the age of the global economy, customers want to buy your product or service when it is convenient for them. The need to have rich descriptions, images and details about your products online is driven by customer demand. That demand is only half the battle, the customer then wants to be able to instantly purchase that product and of course, get it right away, after all your competitor can offer that to them. Todays e-Commerce solutions have graduated to a level far beyond a simple shopping cart. Customers want the ability to manage all aspects of the purchase and their relationship with you through this means. Perhaps most important to this phenomenon is the experience the customer receives after the order confirmation is complete. Order execution to the customer and if necessary back to you, must be simple, quick and seamless.

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E-commerce: All about Customer Relationship Management


Customer relationship management (CRM) is all about understanding the customer's needs and leveraging this knowledge to increase sales and improve service. CRM blurs the boundaries between sales and service, and unify a company's activities around the customer. The overarching goal is to increase customer share and customer retention through customer satisfaction. The strategic importance of managing customer relations is not new by any stretch of the imagination. What is new is the customer centricity focus that CRM brings to a company. This new focus is the direct result of the electronic world. The World Wide Web is the perfect place to get to know and cultivate the client on a one-to-one basis. It offers an unparalleled opportunity to personalize services, provide multiple choices for customer support, track customer satisfaction and deliver loyalty programs. The implementation of CRM goes beyond automating functions. It entails a fundamental change in the culture and operations of an organization. It also means addressing the infrastructure requirements for its implementation on the web.

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A successful CRM implementation strategy needs to consider the following:

Knowledge Management:
At the heart of a CRM implementation is the acquisition of information about a customer, its analysis, sharing and tracking. Also integral to the use of knowledge for competitive advantage is for employees to know what actions to take as a result of this knowledge.

Database Consolidation:
This involves the consolidation of customer information in a single database and the re-engineering of business processes around the customer. The goal is to have all interactions with a customer recorded in one place to drive production, marketing, sales and customer support activities.

Integration of Channels and Systems:


The epitome of online service is to respond to customers in a consistent and high-quality manner through their channel of choice, whether that is the e-mail, the phone or online chat. This in turn dictates the seamless integration of all communication channels with the customer database. It also dictates the integration of CRM with other parts of a company's business systems and applications.

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Technology and Infrastructure:


Sophisticated tools exist to automate and streamline online customer service. The self-help model typically achieved using a combination of tools (e.g. knowledge bases with an intuitive search capability, agent technology or automated email) can be complemented with real-time interactions provided by live chats and IP telephony. While the tools are available, the crux of the matter is to ensure the ability of the organization and the scalability of the technology infrastructure to cope with increased volumes.

Change Management:
CRM is more than technology; it involves a change in philosophy and attitudes. The new mantra is to do what it takes to delight the customer. Consequently, a process for managing change must be instituted to help a company move from a product centric focus to a customer centric one. The International Data Corporation (IDC) notes that the customer relationship management market is exploding with activity. Among its key findings is the strong evidence that companies are willing to pay a premium for higher-than-average solution performance, suggesting that vendors who can get the job done will be rewarded.

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To keep abreast with new developments on the market, I conducted an Internet-based search for new CRM offerings. The search turned out to be informative and entertaining. At Oracle, I listened to a webcast of a speech by its chairman Larry Ellison that stresses the ease of implementation of Oracle's solution for CRM and its use by a number of companies, including Amazon.com. At the SAS Institute, editorials and specific information on the SAS CRM solution complement audio clips of distinguished speakers. The SAS solution for CRM brings together several key technologies such as data warehousing, data mining, online analytical processing, and Webenabled query and reporting tools. It also leverages through its Partner program, the strengths of companies providing subject matter and industry expertise. On its part, IBM launched in November 1998 Core point, a new software company dedicated to CRM. Based on the published documentation, the impressive Core point suite combines sales and marketing products, service and support products, foundation products (e.g., telephony, voice response, web collaboration), and decision support products to better serve clients. Also, a new CRM consortium that delivers turnkey solutions, Enterprise 360, was announced last February at the DCI Customer Relationship Management Conference in Chicago. Enterprise 360 is a pre-configured, pre-integrated Customer Relationship Management
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solution forged by KPMG, Pivotal Software, Microsoft and HewlettPackard, with other innovative software application providers including Epiphany, an up-and-coming company. The CRM thrust underlines a fundamental truth so well said by Wharton professor of marketing David Schmittlein and reported by SAS. Com, that is, "unlike most other organizational assets, customer groups, if managed and maintained cannot be easily copied by the competition. In other words, customers are one of the few sustainable competitive advantages open to a company.

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Conclusion
Customer relationship management CRM is perhaps the most important strategic weapon for contemporary businesses. CRM, already a multi-billion dollar industry has been growing rapidly and based on various reports it will continue to grow in the future. Industry experts also indicate that CRM is here to stay. However, not all companies have been successful in CRM development and implementation and there have been many reports of CRM failures. To facilitate CRM

implementation and to minimize risk, this paper proposed an integrated development methodology based on modular open architectures. The methodology is a supplement to traditional software development methodologies and if followed properly, it ensures that CRM systems will remain viable and cost effective, and evolve as customer and user requirements and technologies change.

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