C.R.M.

Thesis & Case study

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Kawinder jit Sakshi Sharma
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 Introduction
The term CRM, more recently re- labelled Customer
Management, only came into use in the latter part of the
1990s, the principles on which it has been based have
existed for much longer. CRM builds especially on the
principles of relationship marketing, the formal study of
which goes back 20 years but the origins of it, involving
building relationships of mutual value between suppliers
and customers, have existed since the start of commerce.
However, what has changed over the past decade is a
series of significant trends that collectively shape the
opportunity better to serve customers through
information-enabled relationship marketing, or CRM
 WHAT IS CUSTOMER
RELATIONSHIP MANAGEMENT?
Customer Relationship Management (CRM) is about delivering:
Increased Economic Value Add (EVA)*
Increased revenue and profit
Through knowledge and understanding of:
Who your customers are
How they interact with your business today
How they wish to interact with your business in the future
How valuable and profitable they are to you
What their future value is to you
By enabling you to make informed decisions about:
Overall business strategy for your organisation
Which customers you should acquire and develop
What services or products you should develop, acquire or provide
What channels you need to support and develop
How to focus/organise your business to deliver operational excellence
aligned to the strategy
* A way of analysing what to invest in by assessing what offers the best return on
resources of all types (people, money, time, etc)
CRM processes that need to be considered
by most organizations are
• the strategy development process
the value creation process
the multi-channel integration process
the information management process, and
the performance assessment process.
 In simple terms we says as
• Retaining customers and preventing them from defecting to
the competition
• Determining which products and services to bundle together
to increase customer profitability
• Attracting and retaining profitable customers
• Treating customers as individuals
• Implementing technology solutions that will achieve corporate
objectives
Who Is the Customer? Let’s define customer, a word which first came
into the lexicon about 100 years ago and which many companies are
still trying to define. A customer may take many forms; for example, a
customer may be one of the following

• Consumer —someone who buys products or services at the

retail level

• Distributor —someone who buys products at the wholesale

level for
• distribution

• Business-to-business organization— a company that buys

products and integrates them with their own

• Internal department —a department that buys products from

other departments
A Shifting Paradigm The paradigm of buyer and supplier had shifted,
and they were no longer just buyers; they now needed to be treated
with respect. Specifically, the buyers expected suppliers to have certain
attributes when dealing with customers, attributes these organizations
had not necessarily required previously, including the following:

• Imagination — using creativity in customer campaigns

• Individualization of customer needs — treating each

customer as if he or she were the only customer

• Flexibility — expecting suppliers to be flexible in product

or service offerings
 The rise of CRM The emergence of CRM as a
management approach is a consequence of a number of important
trends. These include:
• the shift in business focus from transactional marketing to
relationship marketing
the realization that customers are a business asset and not
simply a commercial audience
the transition in structuring organizations, on a strategic basis,
from functions to processes
the recognition of the benefits of using information proactively
rather than solely reactively
the greater utilization of technology in managing and
maximizing the value of information
the acceptance of the need for trade-off between delivering and
extracting customer value
the development of one-to-one marketing approaches.
 1.Marketing on the basis of
relationships

The shift in marketing focus from increasing the number and value
of transactions (transactional marketing) to growing more effective
and profitable relationships with multiple stakeholders (relationship
marketing) has profound benefits. Marketing on the basis of
relationships concentrates attention on building customer value in
order to retain customers. By building on existing investment, in
terms of product development and customer acquisition costs,
firms can generate potentially higher revenue and profit at lower
cost. Relationship marketing also produces significant intangible
benefits. The prominence given to customer service encourages
customer contact and customer involvement. As a result, firms can
learn more about customers’ needs and build this knowledge into
future product and service delivery.
 2.Viewing customers as business
assets
This focus on the ‘relationship’ rather than the ‘transaction’ is evident
in the emergent view that customer relationships represent key
business assets. The implication is that relationships with customers
can be selectively managed and further developed to improve customer
retention and profitability. This represents a significant departure
from the more traditional view that customers are simply a
commercial audience that need to be broadcast to by a range of
advertising and other promotional activities.

One aspect of a company’s market value is future profit stream

generated over a customer’s lifetime. If customers are viewed as
business assets then the company will focus on growing these business
assets and its market value. CRM stresses identifying the most
profitable customers and building relationships with them that
increase the value of this business asset over time.
 3.Organizing in terms of
processes
In the present highly competitive marketplace it is imperative that
customers are viewed as individual and complete entities that comprise
a relationship, rather than be viewed as a series of individual
transactions. To obtain and present a unified view of customers
requires internal coordination and collaboration that is oblivious to
functional boundaries In recent years, companies have started to
realize the advantages of organizing in terms of processes rather than
functions. Process oriented firms retain their functional excellence in
marketing, manufacturing and so on, but recognize that processes are
what deliver value to the customer as well as to the supplier. A process
is essentially any discrete activity, or set of activities, that adds value to
an input. In the modern marketplace, customers rarely seek an
‘isolated’ product; they also want immediate delivery, guaranteed
warranty and ongoing service support
4.From reactive to proactive use of
information
CRM is also about achieving, maintaining and improving
competitive strength by anticipating customers’ future needs as
well as satisfying their current requirements. With an ever-
expanding wealth of options on offer, customers are faced with
increasingly personalized choices. The move from ‘mass market’ to
‘mass customization’ in marketing has created a buyer’s market.
Empowered to choose (and to refuse), customers exert
tremendous influence over the actions of supplying organizations.
Their weapons are a diminished sense of loyalty and a greater
propensity to switch to organizations that can promise (and
deliver!) something better. To increase customer satisfaction and
reduce customer attrition, businesses must know their customers
(and competitors) like never before and use this knowledge
proactively
5.Deploying IT to maximize the value
of information
ACRM system has two major IT components: a data repository that
enables the organization to collect a complete set of information on
customers (used with a set of analytical tools to develop a better
understanding of customers in terms of past and likely future behaviour);
and a set of applications that enable value-adding interactions
with customers, often across different channels, in order to meet their
needs. Technological innovations such as clever screen prompts,
which advise customer service representatives of a customer’s profile
and appropriate call centre tactics can be used to increase cross-selling
and upselling, provided that staff are suitably trained, equipped and
motivated. By using IT to listen to and learn from customers, companies
can create opportunities for securing a greater share of wallet as
well as market share.
 6.Balancing the value trade-off
Crucially, CRM highlights the trade-off between delivering and extracting
customer value. The overall value creation process can be considered in terms
of three key components. These are: determining what value the company can
deliver to its customers (the value the customer receives); determining what
value the organization can extract from its customers (the value the
organization receives); and, by managing this value exchange, maximizing the
lifetime value of desirable customers and customer segments. Relationships
are built on the creation and delivery of superior customer value on a
sustained basis. This is why the identification of what constitutes customer
value in specific markets and segments is so important. Creating an
appropriate balance between the value delivered to customers and the value
received in return and recognizing how this may need to change for different
customer segments, is an essential element of CRM. For example, grocery
shoppers are increasingly turning to the convenience of the Internet for their
weekly shopping. More sophisticated e-shoppers are demanding online
options that will allow them to compare prices among similar products, select
items based on the nutritional information provided by manufacturers and
check out new products.
 7.Developing ‘one-to-one’
marketing

One-to-one marketing is a form of marketing in which dialogue

occurs directly between a company and individual customers or
groups of customers with similar needs. Many B2B organizations
with large customers practise one-to-one marketing through key
account management strategies. Smaller customers may be dealt
with in a more impersonal way through call centre or mail order
strategies. In business-to-consumer (B2C) markets the cost of dealing
with customers on a one-to-one basis is frequently prohibitive and
other means of facilitating dialogue must be found.
The Internet has proven to be a powerful tool for involving both
B2C and B2B customers in the marketing process, enabling a one-toone
dialogue rather than relying on mass communications. The
unique capabilities of the Internet allow marketers to capture the
anonymous behaviour necessary to be able to answer the question,
‘What does each customer want?’
 What exactly is the definition of Customer
Relationship Management?
Ask a dozen professionals, get a dozen different definitions. Here's a general
overview:
CRM is used to learn more about your key customers needs in order to develop a
stronger relationship with them. Customer Relationship Management can be
defined as a companies activities related to increasing the customer base by
acquiring new customers and meeting the needs of the existing customers. CRM
is about building partnerships with your customers. It uses internal business
processes from Sales, Customer Service and Marketing. The philosophy of CRM
is the recognition that your long-term relationships with your customers can be one
of the most important assets of an organization, providing competitive advantage
and improved profitability The most important part of CRM is the "customer-focus".
CRM uses technology, strategic planning and personal marketing techniques to
build a relationship that increases profit margins and productivity. It uses a
business strategy that puts the customer at the core of a companies processes
and practices. It requires this customer focused business philosophy to support
effective sales, marketing, customer service and order fulfillment. Regardless of
company size or industry, businesses have begun to recognize the value and
importance of customer retention and are embracing new technology for
automating customer service and support. For the new millennium, it seems that
the customer has finally become King!!!
Thus we define CRM as follows:
CRM is a strategic approach concerned with creating
improved shareholder value through the development
of appropriate relationships with key customers and
customer segments. CRM unites the potential of IT
and relationship marketing strategies to deliver
profitable, long-term relationships. Importantly, CRM
provides enhanced opportunities to use data and
information both to understand customers and
implement relationship marketing strategies better.
This requires a cross-functional integration of people,
operations, processes and marketing capabilities that
is enabled through information, technology and
applications.
 BIRTH OF CRM "CUSTOMER FOR LIFE THROUGH
SYSTEMS AND SMILES".
- MR. MAHESH. DADLANI
CUSTOMER RELATIONS, ORANGE

Throughout the 90s businesses were focused on improving internal

operations. CEO’s tried to distinguish their company through operational
excellence and product innovation. Middle management focused on
automating departmental functions such as sales and help desk support.
They believed that automation and better management of their sales and
customer service process would lead to increased revenue and
customer satisfaction. Vendors were all to happy to support this belief
and raced to the scene with independent solutions for sales force
automation, help desk and customer service functions. While many of
these applications provided increased productivity, the approach of
using independent solutions to address departmental needs served only
to created islands of information and database duplication. Furthermore,
the lack of system integration and workflow between these departments
meant that vital customer information was unavailable to sales and
support personnel without jumping from system to system. This did little
to support cross selling opportunities or increase customer satisfaction.
 BIRTH OF CRM cont:

By the time customers walk into your business - or log-on to your

website or call your sales center most already know what they want and
how much they're willing to pay. With easy access to mountains of
information, today's customers do their homework, and they now have
the upper hand in most purchase transactions. In response, sellers are
bending over backwards to improve offerings and services. However,
rather than adopt a streamlined "you-want-it-we've-got-it" approach,
sellers have created a marketplace
where products and services are sold, serviced and marketed in an
increasingly fragmented and ultimately frustrating way. Never before has
so much "clutter" bombarded consumers from so many online and offline
sources. Trying to be all things to all buyers, sellers face a harsh reality
that brings an old adage to life: You can please some of the people most
of the time and most of the people some of the time, but you can't please
all of the people all of the time.
 BIRTH OF CRM cont:
It wasn't supposed to be this way. Customer Relationship
Management (CRM), which swept through the business landscape
in the early 1990s, brought the promise of helping sellers please
most of the people most of the time. Riding the coattails of customer
satisfaction would come increased organizational efficiency and,
better still, increased revenues. That dream has been slow in
coming. While incremental improvements have occurred, CRM has
not yet delivered its ultimate promise - the transformed customer
experience. Yes, companies have implemented call centers and
sales force automation software and customer sales representative
training. However, while improving the sales and service
components of customer transactions, companies have largely
ignored the very piece required to attract customers
in the first place. It's the piece that ensures sales and service efforts
are effective and integrated. It's the piece that allows sellers to
segment and analyze their customer information in order to create a
more personalized, long-term relationship. It's the piece called
"marketing
 BIRTH OF CRM cont:
As CRM evolved, many companies assumed that just bolting on new
technology (e.g., client/server, call centers, sales force automation software,
data warehouses, etc.) or adding new services would enhance customer
relationships. This assumption was as pernicious as it was false. After all, you
can't sell what people don't want to buy, no matter how efficient and service-
oriented your sales channel. And as for gathering customer insights, be
careful what you wish for. Many companies faced the unsettling paradox of
having advanced data availability and analytic techniques that quickly
outpaced their ability to absorb and apply the information. They were left with
sophisticated tools that offered little real value. The belief is that the third
wave of CRM will bring about the ultimate transformation of customer
experiences - not just by strengthening sales and service or even promoting
interactions with your customers - but by creating a series of "intelligent
conversations" that build over time into a long term, meaningful dialogue. In
this next evolutionary phase of CRM, information will be exchanged and acted
on in real time. Consumer history will be recorded (and remembered) and the
expectations of both parties will be met. Naturally, not every conversation will
be profitable. But the series of conversations and the ongoing knowledge
transfer will continue to grow, creating a memorable and differentiated
customer experience, and, in the long run, a profitable relationship
Evolution Of CRM
 Three Important Factors in Customer
Relationships
Customer retention
Channel purchasing preferences
Propensity models to reduce churn
Changes in life cycle/buying behavior
Lifetime value of customers
Customer acquisition
Integrated detail data form information silos
Build propensity models for new customer acquisitions
Identify customers most likely to purchase
Know when customers touch your business and how to communicate with them
Customer profitability
Identify most profitable customer segments
Discover which new products your most profitable customers are most likely to
buy
Determine optimal allocation of marketing dollars
 Types of CRM
• Operational CRM – This is the area that is concerned with the automation of business
processes involving front-office customer contact points. These areas include sales
automation, marketing automation and customer service automation. Historically, operational
CRM has been a major area of enterprise expenditure as companies develop call centres or
adopt sales force automation systems. CRM vendors focus on offering an increasingly wide
range of operational CRM solutions .

• Analytical CRM – This involves the capture, storage, organization, analysis, interpretation
and use of data created from the operational side of the business. Integration of analytical
CRM solutions with operational CRM solutions is an important consideration .

• Collaborative CRM – This involves the use of collaborative services and infrastructure to
make interaction between a company and its multiple channels possible. This enables
interaction between customers, the enterprise and its employees.

Together, these three components of CRM support and feed into each other. Collaborative
CRM enables customers to contact the enterprise through a range of different channels and
undergo a common experience across these channels. Operational CRM facilitates the
customer contacts with the organization and subsequent processing and fulfilment of their
requirements. Analytical CRM enables the right customers to be targeted with appropriate
offers and permits personalization and one-to one-marketing to be undertaken through
superior customer knowledge.
 Types of CRM

Front Office
Operations
(sales,
Interaction marketing,
With service etc)
Customers
(email, letters,
phone,
meetings, fax
etc) Enhance
Company
Relationship
with
Customer
 Terminology used in the CRM market
includes:
• Strategic CRM – This involves the development of an approach to CRM that
starts with the business strategy of the enterprise and is concerned with
development of customer relationships that result in long-term shareholder
value creation. This is the approach emphasized throughout the book. It
should be noted some authors use the term strategic CRM in a more
restrictive sense to refer to analytical CRM.
• e-CRM – The term e-CRM refers to the use of e-commerce tools or electronic
channels in CRM.
• Partner relationship marketing or PRM – This term is used to refer to CRM
activities that involve the enterprise’s activities with its alliance partners or
value added resellers (VARs). The majority of IT business is done through
indirect channels, so PRM activities with intermediaries are an essential
element of a vendor’s CRM programme. For example, Siebel has five types of
partner: consulting partners, platform partners, technical partners, content
partners and software partners. Within each of these are three levels of
programme: technical, marketing and sales
 WHY CRM
Keeping in mind the pace at which technology is changing today, any
company which is a step ahead of others because of some web product
or service will not be able to hold on to that advantage for long. Key to
stability in today's dynamic marketplace is forging long-term relationships
with the customers.
Customers can be divided into three zones:
1. Zone of defection where customers are extremely hostile and have the
lowest level of satisfaction.
2. Zone of indifference where customers are not sure. They have a
medium level of satisfaction and loyalty towards the company.
3. The third level of customers is in the zone of affection described as
"Apostles". CRM focuses on bringing customers from level 1 to level 3
and retaining apostle customers.
The top four reasons for implementing CRM are:
• gaining customer confidence and loyalty
• providing personalized service to customers
• acquiring better knowledge of customers and their buying habits
• differentiating themselves from the competition
 The strategic framework for CRM

• Strategy development process

• Value creation process
• Multi-channel integration process
• Information management process
• Performance assessment process
Strategy development process Strategy is the art of
creating value. It provides the intellectual frameworks, conceptual models and
governing ideas that allow a company’s managers to identify opportunities for
bringing value to customers and for delivering that value at a profit. In this
respect, strategy is the way a company defines its business and links together the
only two resources that really matter in today’s economy: knowledge and
relationships or an organization’s competencies and customers The strategy
development process focuses on addressing the following key issues: Where are
we and what do we want to achieve in our business?
Who are the customers that we want and how should we segment the
• Business strategy • Customer Strategy
1. Business vision 1. Customer choice and
2. Industry and competitive customer characteristics
characteristics 2. Segment granularity ‘one-to-
one’ (individualization/
personalization) macro-
segmentation micro-
segmentation
Value creation process The process addresses two key
questions:
1. How can we create and deliver value to our customers?
2. How should we maximize the lifetime value of the customers that
we want?

Value customer Value organization

receives receives
• Value proposition • Acquisition economics
• Value assessment • Retention economics

Customer segment lifetime value analysis

 Multi-channel integration process include
all pre-sales
communications, the sales interaction, post-sales service
and support with the custom
Multi-channel integration process
Multi- channel integration
process concerned with
two key questions:
1. What are the best ways Physical Virtual

for us to get to customers Electronic Mobile

Sales force
and for customers to commerce commerce
get to us?
Outlets
2. What does a perfect or
outstanding customer
experience, deliverable at Telephony

an affordable cost, look

like? Direct marketing

Integrated channel management

Information management process is concerned with
two key activities: the collection and collation of customer
information from all customer contact points and the
utilization of this information to construct complete and
current customer profiles which can be used to enhance the
quality of the customer experience ,thus contributing to the
value creation process
Information management process

IT Analysis Front-office Back-office

systems tools applications applications

Data repository
 Information management process cont:

Two questions are of special importance in the information management

process:
1. How should we organize information on customers?
2. How can we ‘replicate’ the mind of customers and use this information to
improve our CRM activities?
the other processes that make up the strategic framework for CRM all
depend on the information management process. The strategy development
process involves analyzing customer data in different ways to provide
insights that could yield competitive advantage. The value creation process
utilizes customer information to develop superior value propositions and to
determine how more value can be created for the organization. The multi-
channel integration process is highly dependent on the systems that
capture, store and disseminate customer information. The performance
assessment process requires financial, sales, customer, operational and
other information to be made available to evaluate the success of CRM and
identify areas for improvement.
 Performance assessment process

• Shareholder results • Performance monitoring

Employee value Standards
Customer value Satisfaction measurement
Shareholder value Results and KPIs (key
Cost reduction performance indicators)

This process involves focusing on two key issues:

1. How can we create increased profits and shareholder value?
2. How should we set standards, develop metrics, measure our results
and improve our performance?
 More lucidly we says CRM strategy as a
ongoing CRM process
Developing and implementing effective and
successful customer relationships through the formal
process of a CRM strategy is not an event, but an
ongoing process, and it needs to be strategically
managed and integrated at all levels within an
organization by every employee. Ultimately, CRM is
all about increasing customer profitability by
identifying detailed customer segmentation,
defining marketing communication strategies, and
providing the intelligent decisions to more effectively
drive retention, profitability, and customer
satisfaction
 Based on the foregoing analysis of today’s customer, there are four distinct
stages in establishing and maintaining a successful corporate CRM process:

1. Interacting — referring to the series of transactions

and interactions that make up a dialog between a
customer and an organization (e.g., sales processes)
2. Analyzing — applying insightful marketing practices
to create relevant interactions that build valued
relationships
3. Learning — connecting interaction points between a
consumer and an organization to obtain knowledge of
the customer
4. Planning — developing marketing plans and
strategies to meet customer requirements
 Interacting

A dialog between a customer and an organization consists

of a series of transactions and interactions and may take
several forms. A transaction may be a telephone or Web-
based product order, a cash request from an ATM, a service
request, or payment of a monthly bill. An interaction may
also include a call for product information, placement
of a product in a shopping cart without purchasing it, a
complaint about the quality of a product or service, or a
request for the status of a shipment. It might also involve a
profile update such as a life-cycle event — change of
address, increase in family size, change in marital status,
etc.
 Analyzing:
Analyzing customer behavior means applying insight to create relevant
interactions that build valued relationships. This is the stage where market
planning comes in and where marketing campaigns are initiated to build
value for customers. Offering a customer something of value emphasizes a
desire to retain that customer

Learning:
Learning to apply the knowledge gained from analyzing customer
behavior, and applying this knowledge to interaction points between a
customer and an organization, defines the third stage in customer
relationship management. In this stage, ongoing procedures for
maintaining customer contact are established through correspondence,
phone calls, or personal meetings — any one-on- one activity that
serves to enhance customer relationships by maintaining customer
contact.
 Planning
A fourth important stage in the CRM process is planning the market
strategies that evolve from knowing customers, their purchasing patterns,
their product preferences, and their lifestyles. This knowledge is a
fundamental requirement to marketing strategies that treat each customer as
an individual and can be achieved through constant analysis of the
customer’s transaction activity.

These four fundamental aspects of maintaining relationships with the

knowledgeable customer of today are the basis for a formalization of a customer
relationship strategy. On each of these fronts, organizations need to position
themselves to gather customer information, store it, and then use the
appropriate technology tools to access this information and apply it to manage
each and every customer relationship. One-to-one customer relationships are
strengthened by monitoring the individual transaction stream to understand
behavior and detect significant changes that lead to the need for a customer
dialog. The transaction stream can be used to accurately assess the value of
each relationship. Transactions can be viewed from different aspects to provide
a consistent, holistic picture by segment, product, or channel. Understanding the
customer and the data can enable privacy policies to be implemented, including
treating each customer according to his or her individual privacy preferences.
 CRM TO ICRM (Integrated Customer
Relationship Management)
Customer Relationship Management (CRM) is developing into a major
element of corporate strategy for many organizations. CRM, also known
by other terms such as relationship marketing and customer management,
is concerned with the creation, development and enhancement of
individualized customer relationships with carefully targeted customers
and customer groups resulting in maximizing their total customer life-time
value. Industry leaders are now addressing how to transform their
approach to customer management. Narrow functionally-based traditional
marketing is being replaced by a new form of cross functional
marketing - CRM. The traditional approach to marketing has been
increasingly questioned in recent years. This approach emphasised
management of the key marketing mix elements such as product,
price, promotion and place within the functional context of the marketing
department.
 CRM TO ICRM (Integrated Customer
Relationship Management) cont:
The new CRM approach, whilst recognising these key elements still need
to be addressed, reflects the need to create an integrated cross-functional
focus on marketing - one which emphasises keeping as well as winning
customers. Thus the focus is shifting from customer acquisition to customer
retention and ensuring the appropriate amounts of time, money and
managerial resources are directed at both of these key tasks. The new
CRM paradigm reflects a change from traditional marketing to what is now
being described as ‘customer management’.

The adoption of CRM is being fuelled by a recognition that long-term

relationships with customers are one of the most important assets of an
organisation and that information-enabled systems must be developed that
will give them 'customer ownership'. Successful customer ownership will
create competitive advantage and result in improved customer retention
and profitability for the company
 CRM TO ICRM (Integrated Customer
Relationship Management) cont:

The development of the Customer Relationship Management (CRM)

marketing practice has made more and more people realize the importance of
strong customer relationship in building sustainable competitive advantages in
their market competitions and in generating sustainable profits in the long run.
However, the currently popular CRM marketing practice often produces
disappointing outcomes. Surveys after surveys, a surprisingly high rate of
failure has been reported for CRM practices. The failure rate of CRM
systems ranges from 50% to over 80%. The major CRM system developers
received much lower Customer Satisfaction scores than companies in other
industries did. The more popular this marketing practice gets, the more people
who realize that the current CRM practice hardly manages customer
relationship. The current CRM practice was originated from a combination
of database technologies and database marketing (analytical
techniques), so unavoidably, it inherits database as its only focus. When
it gets into the spotlight and becomes a major marketing practice, its
inherited characteristics become its limitations. It incorrectly defines
customer purchase and contact behaviors as customer relationship,
restricts its marketing scope within a company's database and ignores
customers needs by focusing on purchase correlation in a company’s
database
 CRM TO ICRM (Integrated Customer
Relationship Management) cont:

Any good customer relationship management

practice should start by answering the following 6
critical questions:
1. What is customer relationship?
2. What drives customer relationship?
3. How to measure customer relationship?
4. Which customers should you build relationship
with?
5. How to improve customer relationship?
6. How to develop effective customer relationship
management strategies?
 CRM TO ICRM (Integrated Customer
Relationship Management) cont:
To effectively manage customer relationship, one should follow
the following rules:
• Rule 1: Building strong customer relationship should be set as
the primary goal of a company’s marketing practice and all
marketing functions should serve to the enhancement of a
company’s customer relationship;
• Rule 2: Customer relationship should be defined and
constructed based on customers’ basic needs. In the “Customer
Centric” customer relationship management practice, needs
construct value and value determines customer relationship;
• Rule 3: Customer relationship should be measured and
improved under market competitions. Customer relationship is
competitive and a company should manage its Competitive
Customer Relationship.
• Rule 4: Customer relationship management practice should not
be a sub-function of a company’s IT department. Customer
relationship management should be an INTEGRATED part of a company’s
marketing practices
 CRM TO ICRM (Integrated Customer
Relationship Management) cont:
Integrated Customer Relationship Management (ICRM) is the latest
marketing strategy, which has developed to meet the challenges raised
from our daily marketing consulting services. It is our solution to overcome
the limitations of the current CRM practice. ICRM provides a theoretical
framework to define and to construct customer relationship based on
customers’ needs under market competitions. ICRM also provides a
practical guideline of a standard process for effective customer relationship
management. ICRM is based on the very fact that by building a strong
customer relationship, a company can build sustainable competitive
advantages in the long run. Therefore, in ICRM practice, building strong
customer relationship is set as the primary goal of a company’s marketing
practices and it requires all marketing functions in a company to serve to
the enhancement of its customer relationship. ICRM puts customer needs
in the center of marketing practices and defines customer relationship
based on customers’ basic needs under market competitions. It integrates
all major marketing functions in the process of building strong customer
relationship. ICRM manages Competitive Customer Relationship.
 CUSTOMER LIFE CYCLE MANAGEMENT
(CLCM)
" CRM IS ALL ABOUT GETTING CLOSER TO CUSTOMER“
CLCM is a three-domain business system, aligning
business processes, technologies, and the
customer life cycle. This business system must
integrate sales, service, and marketing processes
as well as the CRM technology environment with
the customer. To fully realize the potential of CRM,
business systems must align these three domains
in ways that are predictable, repeatable, and
measurable. These systems should be clearly
defined, thus enabling predictable business
activities to be automated and leveraged by
technology.
 Customer Life Cycle Patterns

Engage
This is where advertising or marketing efforts create initial
awareness of the organization or product offering. The
Engage process is fundamentally about "funnel
management," or generating leads and converting them
into customers. However, there is a very important Engage
activity that may start in the service process: cross-sell/up-
sell. What may start as a service request may end as an
Engage activity. This discipline falls predominantly into the
domain of CRM, with sales automation and campaign
management the principal technology applications. There
are Engage activities, including Web based
personalized interactions and electronic catalogs, which
primarily support the e-channel. However, some Engage
functions cross all customer channels.
 In the customer engagement phase of the relationship life
cycle Customer Relationship Management supports the
following key functional areas:
• ● Marketing Planning and Campaign Management --
Enables complete marketing campaigns, including content
development, audience definition, market segmentation, and
communications
• ● Telemarketing and Lead Generation -- Facilitates customer
segmentation, lead qualification, call list management, and monitoring
of campaign progress by using integrated analytical CRM
functionality
• ● Opportunity Management -- Provides sales tracking and sales
forecasting; helps plan sales approaches, identify key decision
makers, and estimate potential-to-buy and potential closing dates
• ● Sales Activity and Contact Management -- Organizes daily
workloads and customer contact information for display in calendar
application; provides links to Business Intelligence reporting
capabilities
 Transact
In the transact process, customers actually
purchase the product offering. Related
Transact activities include product and sales
configuration, pricing, and order management.
Tightly coupled, bi-directional integration with
order management applications is a requisite
technology step in the Transact process
pattern to provide a seamless commerce
environment, whatever the channel
 In the business transaction phase of the relationship life
cycle Customer Relationship Management
supports the following key functional areas:
• • Order Acquisition -- Enables planning, organizing, and implementation of sales
strategy; monitors sales pipeline, sales portfolio, and sales budget; facilitates
coordination of budgets, forecasts, and reports on product and pricing trends
• • Internet Pricing and Configuration -- Delivers online systems that allow users to
configure products online and compare prices across different catalogs and
marketplaces; includes shopping basket functions
• • E-Selling -- Provides solution for selling products and services via the Internet;
covers all phases of sales cycle, including one-to-one marketing, catalog
browsing, search, order placement, payment, contract completion, and customer
support
• • Telesales -- Manages inbound and outbound calls; handles high call volumes;
provides efficient user interface; integrates sales information from back-office
systems and product information from online catalogs
• • Field Sales -- Delivers key customer and prospect information to sales
personnel at any place, at any time; facilitates planning and maintenance of
sales activities, such as appointments, visits, and calls, and provides activity
reports; creates quotations and takes orders; includes support for mobile and
wireless devices
Fulfill
The Fulfill category is where the offering is delivered to the client. This may consist of a
product being physically shipped to the customer, or in the case of an electronic product,
this may simply be an electronic transfer. Fulfilling a service may involve consultants
coming onsite to complete a project, or a utility offering such as telephone phone or
electrical service being turned on. In the order fulfillment phase of the relationship life

cycle Customer Relationship Management supports the following key functional areas:
• • Complete Order Life Cycle Process -- Provides the ability to track and
trace orders at all points along order management, manufacturing,
distribution, and service processes; proactively notifies customers of
changes that affect delivery
• • Real-time Availability Checks -- Enables allocation of resources in real-
time at the front-end; includes real-time access to inventory levels,
production capacity, and lead-time requirements across the entire supply
chain; enables visibility into product and service delivery dates
• • Contract, Billing, and Financials Management -- Provides information
about customer contracts, billing status, and accounts; integrates back-
office functions
• • Fulfillment Visibility and Order Tracking -- Enables real-time tracking of
order fulfillment; provides unique, customized and "guided" content for
customers; allows sharing of information with customers via the Internet
 Service
Another process predominantly in the CRM domain, Service is the final
stage of the customer life cycle and typically involves helping the
customer work with the product offering. To do this, the organization must
provide support functions ranging from troubleshooting to replacement.
Other Service activities include issue tracking/resolution, self-service,
and cross-sell/up-sell. CRM technologies supporting this process pattern
must support multiple points of interaction, so customers can use
whatever interaction capability they find most appropriate. The notion of
"continuous customer satisfaction" is fulfilled in this stage as well.
The fundamental point here is that when a business interacts with its
customers, customers inherently perceive the business as being able to
support these four life cycle patterns. They also expect this support to be
consistent, and the flow among the patterns to be transparent - in other
words, they don't even realize it's happening
 In the customer service phase of the relationship
life cycle Customer Relationship Management
supports the following key functional areas:
• • Interaction Center -- Provides inbound and outbound call processing, e-
mail management, and activity management to track, monitor, and enhance
all customer contact; supports multiple channels for customer
communication, including telephony and Web; integrates industry-leading e-
Front Office call center applications from Nortel Networks Clarify; provides
certified interfaces to leading computer telephony integration (CTI) solutions
• • Internet Customer self-service -- Offers customers and prospects access
to information and customer service functions via Internet; supports effective
customer self service; includes case-logic system featuring advanced
decision support for problem determination and resolution
• • Service Management -- Meets varied demands of service management
business; handles customer installations; facilitates simple and complex
services; supports services carried out at customer site or in-house repair
center (depot); supports involvement of external service providers;
integrates contract management; checks customer warranties when
services are performed; calculates services charges; integrates information
from materials management, cost accounting, billing, and accounts
receivable; monitors day-to-day operations; helps decision makers with
strategic management issues
• • Claims Management -- Facilitates handling of entire
claims process
• • Field Service - (Mobile Service) -- Delivers and tracks
customer and account information for field service
personnel; provides service planning and forecasting,
scheduling, and dispatching functionality through tight
integration with fulfillment systems; includes support for
mobile and wireless devices
• • Field Service - (Dispatch) -- Enables rapid allocation of
service engineers and materials to meet incoming
service requests
• • Integration of Marketplace Services -- Provides access
to a broad range of applications and services hosted on
virtual marketplaces
Repeat customers: At this level focus is on getting
customers to return for a second, third, or fourth time.
Customers may come back for the same purchase. The
customers may turn for variety of products and services.
For e.g. car insurance customer may come back to the
agent for disability and life insurance. Repeat customers
develop greater economic and emotional ties with you.
Customer Advocates This level represents those
customers who are not just satisfied and are willing to do
business with you again. These customers actively tell
others about their positive experience. They spread the
good word. They maybe considered as active participants
on your marketing team. Each level is build upon the level
before. Without quality initial transactions, customers
won’t want to do business with you again. And it’s the
customers who sees himself or herself in a positive
relationship with you who can provide the strongest
advocacy for you and your products and services.
 Customer Need Assessment and
Acquisition

Customer
Customer
development
Retention and
Through
Referrals for new
R M Personalization and
Customers C Customization

Customer Equity
Leverage through
Cross Selling and
Up Selling
 E-CRM
“CRM IS A CORE ELEMENT IN ANY CUSTOMER-
CENTRIC E-BUSINESS”
The rules of the game have changed for CRM. Customer demand for
increased value, greater convenience, and more control over products and
services, along with heightened pressure from competitors, have increased
customer acquisition costs and decreased customer and brand loyalty. At
the same time, advancements in technology have enabled the cost-effective
distribution of huge amounts of customer data, the delivery of customized
products, and the efficient use of interactive channels. These technology
developments are creating major opportunities to collect and use customer
information to gain a better understanding of customer needs and to
strengthen customer relationships. To take advantage of these opportunities
and address the escalating demands of customers, companies are shifting
the focus of their efforts to adopt a customer-centric approach. Product
excellence, innovation, and operational efficiency are still important;
however, successful companies are building on these existing business
strengths as they shift their attention to their customers. E-CRM refers to
the set of activities that enable a firm to utilize the power of the Internet and
the electronic medium to implement CRM. Firms all around the world have
realized the potential of the Internet as a medium for CRM and have been
actively pursuing e-CRM strategies.
 The following statistics highlight the importance
and potential of the e-CRM industry
• • General Motors (GM) receives about 100,000 emails from its customers, every
day.
• • According to IDC and Forrester worldwide investment in ecrm solutions will
reach $11 billion to $14 billion annually by 2003. And the payoff is significant.
• • Jupiter Communications survey of companies who have implemented eCRM
solutions found that, on average, companies were able to recover their
investments in seven months. Even more impressive, the average return after
one year was 300%.
• • Cisco Systems automated customer interactions with its one-to-one website,
saving $270 million in annual operating expenses and significantly reducing the
time required to place an order.
• • Amazon.com was able to achieve a repeat purchase rate of 78%, more than
double the industry average, by building one-to-one relationships with its
customers and targeting their individual needs. This customer loyalty has enabled
Amazon to remain a viable e-commerce company at a time when so many other
dot-coms have failed.
• • Sears demonstrated the cross-channel benefits of eCRM by increasing Web
shoppers' subsequent offline purchases by 27%.
• • The volume of customer related email traffic is so much that almost 42% of the
queries never get answered by the companies.
 To achieve positive results like these from their e CRM
efforts, companies must develop a comprehensive strategy
for managing and utilizing customer knowledge. This
strategy should include three key objectives:

• Know Your Customer:

Know Your Customer is about understanding your individual
customer's value and needs. This understanding comes only from
collecting information that customers provide in their interactions
with your company, and developing a 360-degree view of customer
behavior across all touch points. As you begin a dialogue with
individual customers, you create a learning relationship with your
customers; each interaction becomes an opportunity to build and
extend your relationship with that customer. The more extensive the
learning relationship, the more invested the customer becomes in
the relationship and the more difficult it will be for the customer to
switch to a competitor.
 Reach Your Customer
Reach Your Customer is about reaching the right
customers with the right offer at the right time through
the right channel. Based on your knowledge of each
customer, you are able to reach specific customers with
targeted offers, information, products, and services. You
reach each customer with a personalized message
based on his or her needs, behaviors, and value.
Grow Your Customer
Grow Your Customer refers to your company's ability to effectively execute
Marketing strategies based on your knowledge of customer share and
customer lifetime value. You must use scarce investment dollars to target
your efforts to your best, most valuable customers. Increasing the total
value of your customer base by retaining and growing your best
customers, is significantly less expensive than trying to generate the same
amount of value by acquiring new customers. Focusing on your best
customers requires you to re-examine and re-allocate total Marketing and
sales investments from less profitable customers and the acquisition of
new customers.
 A complete e-CRM architecture would
comprise of the following components
• 1. Sales Force Automation (SFA)
• 2. E-Mail Management System (EMS)
• 3. Interactive Voice Response (IVR)
• 4. Knowledge Management (KM)
• 5. Call Centers
• 6. Instant online querying through Chat

The above-mentioned proposition can be illustrated with a simple example. A

person dealing with a bank should be able to get the same level of service whether
he contacts the bank through phone, the Internet or in person. This implies that all
details about the person and his past transactions need to be consistent and
available vis-à-vis every channel.
 ROLE OF MARKETING IN CRM
"CRM IS ONLY A TOOL…………….., ATTITUDE IS
EVERYTHING".

To continuously attract and retain the most valuable

customers, companies must act aggressively to increase the
economic value of both their brand and customer relationships.
In addition, they must sustain bottom-line performance in the
face of skyrocketing marketing costs. To realize these goals,
companies must continue their efforts to maximize their
investments in the sales and service technologies that help
reach, understand and interact intelligently with customers. But
they must also extend this traditional scope of CRM to reach a
higher standard of excellence in three distinct
disciplines: analytical, creative and operational
marketing.
 Analytical Marketing
Analytical Marketing drives market segmentation and identifies your
most profitable customers. Information from each customer
interaction channel is collected, analyzed and used to develop
predictions of your individual customer's behaviors. Analytical
marketing utilizes those processes and sophisticated technologies that
allow businesses to direct their overall marketing investment across the
brand and customer. In a sense, analytical marketing tools are the "nuts
and bolts" of the marketing engine. Specifically, analytical marketing
converts customer data, gathered at various touch points, into relevant
insights that direct market segmentation activities and feed into more
effective campaign design. Through predictive modeling, analytics lead to
a more robust understanding of customers and markets and an improved
ability to make strategic and operational decisions about customer
treatment. The ultimate outcome is increased profitability, based on
customer differentiation, and more informed decisions related to the
development of product, pricing, promotion, packaging, and channels.
Without analytics, companies will keep investing in CRM without ever
knowing where their money is having the greatest impact. In short,
analytical marketing puts customer insights to work for the
organization and prevents the company from delivering the wrong
content to the wrong person at the wrong time.
 Creative Marketing
Creative Marketing relies on analytical tools and customer insight
capabilities to improve marketing programs, optimize the overall
marketing investment and deliver the brand promise. As the number of
customer channels has exploded, so has the need for creative marketing,
which involves all the activities associated with building and sustaining a
compelling brand and ensuring that customer interactions reflect a
satisfying brand experience. In the past, creative marketing efforts have
been applied to CRM efforts in much the same way as technology. It's
been far too easy for companies to develop a host of messages - from ad
campaigns to customer service representative scripts - that are
unintentionally inconsistent. Such inconsistent messages delivered via a
number of different channels - when coupled with poor understanding of
why; brand and message consistency is so critical to the customer
experience - often produce fragmented experiences that frustrate the
customer who probably won't come back. Fortunately, companies are
changing the way they approach creative marketing. By integrating its
processes with those of analytical and operational marketing, and by
focusing on the total customer experience, creative marketing can now be
used to build a unified brand across all of a company's online and offline
channels. In other words, creative marketing is no longer considered an
"afterthought".
 Operational Marketing
Operational Marketing relies on customer insight information to
personalize interactions, differentiate sales and service across
segments, drive continuous improvement across customer interaction
processes and generate revenue lift. When these marketing disciplines
work in tandem with your existing sales and service capabilities, your entire
CRM effort becomes revitalized. Information becomes dynamic. Insights
become powerful barometers of customers' likes and dislikes.
Comprehensive marketing campaigns become targeted and compelling.
The result is a customer base that is pleased with the unique and
personalized interactions you provide. Customer loyalty rises, as does your
brand value and, ultimately, your revenue. Its efforts encompass all the
activities of data mining and data warehousing, which continuously harvest
customer information from a variety of contact points. Leveraged by creative
and analytical marketing capabilities, this information is assessed and
converted into meaningful insights that drive ongoing, personalized
marketing efforts. The goal of operational marketing is to enable
ongoing "conversations" with individual customers across all
channels.
The Technology of CRM Four major areas of
technology contribute to a successful CRM project:

• 1. Data warehousing
• 2. Database management systems
• 3. Data mining
• 4. Business analysis software
 An Overview of the Data Warehouse

The technology foundation of a successful

CRM strategy is the development and
implementation of the data warehouse. This is
the technology that enables organizations to
gather and store large volumes of customer
transaction data in a format that enables the
data to be analyzed and manipulated to
provide valuable business information on the
customer database
 Technology as a Driver and Enabler of Change

Customer Input

Process
Improvement Implementation

Strategy

Driver of
Change

Technology
Data Warehousing Objectives

• To produce an information infrastructure that

provides the right information to the right people
at the right time — and at the right cost

• To provide an architecture that yields a single,

current version of customer data

• To enable the incremental deployment of

subject-oriented data marts that are developed
according to well-identified business needs
 Characteristics of the Data
Warehouse
• 1. Subject-orientation — data organized by
subject
• 2. Integration — consistency of defining
parameters
• 3. Time-variance — a timeliness of data
and access
• 4 . Non-volatility — a stable data-storage
medium
Data Warehousing and CRM: Managing the
Project At the data warehousing stage, and throughout the
technology selection and implementation process, the objectives of the
CRM project need to be aligned with traditional management processes
through the following analysis activities:

• Identifying applications with large benefit

opportunities and exploiting those opportunities
• Identifying the return on investment (ROI) of
each application
• Identifying applications that are not cost-
justified, and improve, move, or eliminate them
• Measuring the total cost of ownership (TCO)
• Reporting quarterly and annually on the results
of the corporation’s investment
Data Warehouse Development: One Vendor’s
Methodology- One methodology that the CRM project team can
follow in the development of a data warehouse is a process developed
by NCR Corporation, which re commends the following major steps in
the implementation process:
• Solution readiness — Ensure that the plans and
the environment are complete.
• Physical database — Implement the data model
into the database management system.
• Data transformation — Build the applications for
initial loading and ongoing maintenance of the
data warehouse.
• Client server application — Prepare the tools
needed to access the data warehouse.
• Data warehouse management — Prepare the
tools and procedures needed to manage the
system
 Solution Readiness
Solution readiness examines those elements that
are necessary to support the implementation and
determines the status of each one, as follows:
Data readiness Solution
Readiness

Technology readiness
Functional readiness Client/Server
Application
Development

Support readiness
Infrastructure readiness Physical
Database
Design

Data
Transformation
Physical Data Modeling The primary activities in this process are:
1. Translating the logical data model to a physical
database design
2. Database construction and design optimization
3. Functional testing of the constructed database

Data Transformation

In this stage, utilities and programming software are developed, which will
enable the data warehouse database to be loaded and maintained. Data is
located, extracted, conditioned, scrubbed, and loaded onto the target platform.
The time required for performing the data transformation function will vary
and is based on the amount of data, the source of the data, and its condition.
A transformation tool may be used to make the transformation easier and
less time-consuming; however, there are some transformations and quality
checks they will not perform.
Client/Server Application Development

This development process provides the implementation

of applications for the query interface for a data
warehousing solution, utilizing the prototypes,
specifications, recommended tool-sets, and other
outputs of the application design. The applications that
allow end users to access the data and information they
need to perform their business functions will also be
developed. Training and documentation that describes
the tools and data content being made available to solve
business problems are provided to users at the same
time. Business members of the project team can assist
in developing and documenting the productive
methodologies for utilizing this new business information
and analysis resource.
 Data Warehouse Management
Planning the data warehouse management function is an important element
of the overall planning process that implements the data, network, systems,
and operations management procedures necessary to manage the environment
successfully, and includes the following action items:
• Emergency operating procedures
• Administration of users and database space allocation
• Back-up and archiving of system and applications tables
• Security maintenance and auditing
• Procedures for restoring/recovery of individual tables, databases, or the
entire system
• Usage reporting
• Operation of in-box and out-of-box replication
• Application and table/view version control
• System and application error analysis and resolution
• Establishing service level goals and reporting performance versus goals
• Monitoring tools and procedures for identifying service level issues such
as tables locked by applications and runaway queries
 Database Management Systems

In a repetitive processing environment, most

relational database management system (RDBMS)
tools can perform the functions required, because
of the ease of predictability of results. However,
iterative processing tends to be more unpredictable
and requires a much more sophisticated database
management system that is designed to handle the
real-time data query environment of an operational
data warehouse.
 The capability of the RDBMS to handle the
business information workload will depend
on four characteristics:
• 1. Complexity of the data model
• 2. Number of concurrent users
• 3. Data volumes
• 4. Complexity of the processing
environment
Complexity of the Data Model

Iterative processing is capable of running against any data in the warehouse.

Therefore, the data must be modeled to match the business, rather than for
a specific set of applications. The database model that results from this
condition is referred to as a “third-normal form” model, and is very complex,
placing considerable stress on a DBMS.
In a data warehousing environment, every data modeling concession made
for performance will leave some questions unanswered. Unanswered questions
mean unaddressed business issues and a more difficult support environment

Number of Concurrent Users

A data warehouse may have a mix of iterative and repetitive users at any
given time, and the number and mix of users are important characteristics
from a system performance perspective. In the discussion of product selection
methodologies, it was pointed out that benchmarking has some limitations,
and one of them is that it does not adequately simulate the case where there
are multiple users of different types.
 Data Volumes

Data volume is a critical element affecting the selection of the database

management system, because some products may have bottlenecks that do
not show up at lower data volumes. The amount of data may significantly
impact the capability of the system to load data within a batch window. For
example, the inability to meet batch windows with a normalized model may
require one table to be split into several smaller tables. Parsers have distinct
limits, which vary by DBMS product, in determining how many tables can
join in one query.

Complexity of the Processing Environment

The DBMS processing capability is affected by the iterative processing and

detailed data, which present a more complex processing environment, particularly
when the user mix may include both iterative and repetitive types. The
number of users and the workload mix are crucial components of the data
warehouse. Combinations of large amounts of data and large numbers of users
often cause failure in a data warehouse environment and definitely increase
the complexity of the processing environment.
 Data Mining
The technology of data mining is closely related to that of data warehousing
and is interwoven with the database management system. Data mining involves
the process of extracting large amounts of previously unknown data and then
using the data to make important business decisions. The key phrase here is
“unknown data,” meaning data that is buried in the huge mounds of operational
data that, if analyzed, provides relevant information to organizational
decision makers

Significant data is sometimes undetected because most data is captured

and maintained by a particular department. What may seem irrelevant or
uninteresting at the department level may yield insights and indicate patterns
important at the organizational level, in particular, customer behavior and
purchasing patterns. Determining the effectiveness of sales promotions, detecting
fraud, evaluating risk and assessing quality, and analyzing insurance claims
are some of the areas where this information can assist decision making
 Vendors with CRM Technology
The vendor selection process, particularly in the area of packaged software,
must be conducted with corporate priorities as a key criterion, coupled with
the desired functionality

Checklist for Vendor Selection

Technology choices should be based on a structured and detailed comparison

between a reasonable number of qualified vendors, by following these basic
steps:
1. Identify internal IT issues first.
2. Assess requirements of technology with all departments.
3. Prepare invitation to tender with details on functionality, capacity, and scalability.
4. Based on responses received, prepare an initial short-list of suppliers.
5. From this list, select two or three to develop a prototype to demonstrate operational
functionality.
 The key segments for CRM applications include:
• Integrated CRM and ERP Suite (e.g. Intentia, Oracle PeopleSoft, SAP)
• CRM Suite (e.g. E.piphany, Siebel)
• CRM Framework (e.g. Chordiant)
• CRM Best of Breed (e.g.Avaya, NCR Teradata, Broadvision)
• Build it Yourself (e.g. IBM, Oracle, Sun).

The CRM service providers and consultants that offer implementation

and support include:
• Corporate strategy (e.g. McKinsey, Bain)
• CRM strategy (e.g. Peppers & Rogers,Vectia, Detica, Sophron)
• Change management, organization design, training,HR,etc. (e.g. Accenture)
• Business transformation (e.g. IBM, PwC)
• Infrastructure build, systems integrators (e.g. Logica, Siemens, Unisys)
• Infrastructure outsourcing (e.g. EDS, CSC)
• Business insight, analytics, research, etc. (e.g. SAS, dunnhumby)
• Business process outsourcing (e.g. Acxiom
 The Business Tools: Analytical CRM

Data mining and analytical tools are the third major technology components
of the CRM solution. In combination with the data
warehouse and database technology, these software tools assist in increasing
the return on investment (ROI) on the data already stored. In addition, they
allow organizations to target customers based on behavior patterns, rather
than just grouping or segmenting them according to products they buy, age,
or other personal characteristics, highlighting cross-selling opportunities and
pinpointing the most profitable client profiles. Moreover, analytical applications
are critical for optimizing collaborative interactions, not only with customers,
but also with employees, suppliers, and partners, and ensuring improvements
throughout the entire supply chain.

Integrate Front- and Back-Office Systems

It is important for the project development team to be able to act on the

intelligence gained from the data through integration with front-end systems.
The results of automated data mining processes should feed into marketing and
sales force automation programs through one or another communication
channel
 Necessary Data

Business templates built up from experience over time, e.g., a template

view of the data needed for a churn campaign, are valuable starting points.
They will differ greatly from that for a cross-selling campaign. In some
cases, it may be necessary to supplement internal consumer data with
external data — income, household information, and life stage details, all of
which help to complete the customer profile. These templates must be
amalgamated to provide one unique view of the customer, and continually
updated by ongoing inputs from all points of customer interaction. The ideal
is to have data that is as up-to-date as possible so that the customer profile
contains real-time information. Once this central repository has been
established, data mining tools and techniques can be used to analyze the
data and create different data models for specific, defined business issues.
 Establish Data Standards
Set standards for the format of data in the warehouse — consistent formatting
reduces complications for data extraction. Insist on the highest quality data
from the beginning of the data input stage, to ensure the data warehouse
becomes populated with valid data. Apart from the obvious advantages,
accurate data promotes acceptance of the new CRM system by delivering
reliable and actionable results.

Automate the Decision-Making Process

Automate as much of the decision-making process as possible, from the

extraction of the data to campaign management. For example, intelligent agents
can be used to monitor variances in customer’s behavior to predict key
customer events. Intelligent agents can inform the marketing department when
the customers are likely to leave, based on existing characteristics and changed
behavior
 Data Clustering Offers New Insights

Cluster analysis is an exploratory data analysis tool that uses statistical

algorithms to identify distinct groups of customers that may not traditionally group
together. It is used not only in segmentation for independent validation of
business assumptions, but also to discover new interrelationships between
variables that were previously not available. These clusters act as virtual account
managers, pinpointing changes in an individual customer’s behavior likely to lead
to a specific outcome regarding future behavior patterns. The true power of these
intelligent agents lies in their capacity to be deployed on a large scale. Many
agents continuously and independently monitoring the behavior of each and every
market segment can deliver more valuable results than detailed studies of
individual segments
 CRM implementation
One of the best methods for learning how to
implement customer relationship management
systems in a specific business sector is to analyze
CRM implements in that sector to determine the
factors and processes that have contributed to
success, as well as the benefits that organizations
have derived from their CRM solutions
 Case Study A1: General Motors (GM)

CRM Project Objectives

To enable customers to readily access information on a range of GM automobiles

Corporate Background

Historically, GM dealers have been separated from one another across the
automaker’s different product divisions. As a result, there has been very little
cross-selling among the divisions. There were many disparate pieces of information
among the divisions, making it difficult for customers to obtain specifications,
pricing, etc., on automobiles they wanted to evaluate.

The CRM Solution

GM launched cross-divisional shopping capabilities for a group of 250,000

customers, to assist them in accessing information on a variety of new vehicle
models, through the company’s Web site. Content was changed to enable
customers on one division’s Web site to view product information from another
division
 The Benefits

The key benefits achieved by General Motors as a result of implementing a

CRM solution include:
•Easier customer searches for vehicle information on GM Web sites
•An increase of eight percent in purchase rates
•Increased revenue and profitability

Industry Checklist: Lessons Learned

An automotive manufacturer can implement a CRM solution by:

•Combining automotive industry legacy systems with current data

warehousing and Internet technologies

•Providing customer access to Web site information

Case study 2- CRM in The Student Journey

Outline of Presentation

1. What are the Business Drivers?

2. What is the Student Journey?
3. What is Customer Relationship Management?
4. CRM in practice at RGU (The Robert Gordon
University)
5. Conclusion (Q&A)
Introducing the Robert Gordon University

Our Vision is to be internationally recognized for excellence

in professional education and research.

Our Mission is to inspire and enable the transformation of

individuals, economies and societies
RGU Background

“For the second year running (RGU) ranks behind only

Cambridge in the employment success rate of graduates.”
Times Good University Guide 2004
 Business Drivers for RGU
1. The student as customer (expectations & choice)
2. Coping with complexity and the need to be flexible
3. Demographic changes in the student population
4. Vigorous competition and the need to differentiate
5. Reductions in funding (cost and revenue pressures)
 What is the Student Journey?

Attract Convert Retain Extend

A C R E

Cradle Endowment

Each stage of the Student Journey represents a phase of

Relationship Management……
 What is CRM?
• Meeting individual needs and expectations of customers
• Long term view of the customer’s economic value (LTV)
• Making the whole experience valuable to the customer
• Careful targeting and selection of the “right” customer
 CRM Methodology (IDIC)
1. Identify and understand
2. Differentiate:
– Needs and expectations
– Intellectual capabilities
– Economic value (LTV)
3. Interact (Make it easy to engage)
4. Customize
 The role of technology in CRM
portals
direct campaigns
Web Customization pick n’ mix study
market research polls
forums
enquiry management

Marketing Automation Database Decision Support

analysis
self service reporting
workflow data mining
Process Automation
database
updates
 Risks in CRM Projects

1. Implementing CRM before creating a customer strategy

2. Rolling out CRM before changing your organization
3. Assuming that more CRM technology is better
4. Stalking, not wooing, customers

Rigby, Reicheld and Schefter, “Avoid the four perils of CRM”, Harvard
Business Review, 2002
 Benefits of CRM
• More relevant, accessible and consistent information about students
• Better understanding of who our students are and what they expect
• Selective development of the portfolio based on solid evidence
• Ability to anticipate changing demand and respond swiftly
• Less bureaucracy and more convenient processes for students and staff
• Release time for staff to focus on more valuable activity
• Stronger student progression and fewer defections to other institutions
• Increase recruitment via recommendations from student ambassadors

All of these contribute to greater revenues, lower costs

and a more fulfilling learning experience.
 CRM in Practice at RGU
The way we were: RGU 2000
1. Lack of clarity about who our “customers” were
2. Organizational divisions ( feudal barons and functional silos)
3. Discontented students = lost revenue (sheep-dip processes)
4. Funding constraints and efficiency targets from SHEFC
5. Unfriendly systems understood only by frequent users
6. Over dependence on the expertise of key staff
7. Lack of systems integration and widespread duplication
8. Poor management information to support decision making
The compelling case for change….