Customer Relationship Management-Notes-Unit III
Customer Relationship Management-Notes-Unit III
Customer Relationship Management-Notes-Unit III
UNIT III
Unit III: CRM program - Groundwork for effective use of CRM - Components of CRM
- Types of CRM.
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2. Prospecting:
Prospecting is the effort to win new, first time customers. Apart from the offer itself, the
three most critical elements of prospecting campaign are segmenting, selectivity and
sources. It is essential to develop an effective-need based segmentation model that allows
the organization to effectively target the offer. Without this focused approach, the
organization fails to achieve an adequate acceptance on the offer or spends too much on
promotions, advertising and concessionary pricing.
Selectivity is important to prospecting as it is to win back. Need-based segmentation
defines what the customer wants from the organization and profit-based segmentation
defines how valuable the customer is and helps the organization decide how much it is
willing to spend to get the customer. Pre-scoring a consumer credit rating is one of the
techniques that organization can use to determine the latter.
“CRM-Notes”
3. Loyalty:
Loyalty is the third category in which it is most difficult to gain accurate measures. The
organizations trying to prevent customers from leaving, uses three essential elements:
Value based and Need based segmentation and predictive churn models. Value-based
segmentation allows the organization to determine how much it is willing to invest.
Once the customer is determined to belong to the value based segmentation screening, the
organization can use need-base segmentation to offer customized loyalty program.
Affinity programs such as airline miles and hotel points are some of the most popular
methods. However, the organization focus more on needs of individual customers, they
find that they are able to achieve the same loyalty with less investment.
• Technology
o Using technology to maximize the benefits derived from customer
relationships
o Hardware and software
o Technologies in use today
o The technologies of tomorrow
• People
o Executing a CRM plan
o Assuring a positive customer experience
o How employees can maximize the customer's positive experience
o How to support employees operating in a CRM work environment
• Structure
o The foundations of CRM
Orderliness
Processes
Metrics
o Ensuring that the business functions smoothly for both employees and
customers
“CRM-Notes”
Branching logic:
Surveys designed and executed can incorporate branching logic to dynamically present
customers with different questions in real-time, based on their answers to previous
questions.
The organization should offer a number of unique services designed to help the clients
achieve maximum survey response rate possible including personalizes email reminders
to incomplete respondents.
Customer Database:
Customer Database is the foundation of any CRM programme.
Today’s businesses are better placed for creating versatile customer database:
Today in most businesses, customer data flows in routinely. Customers feed in a good
amount of data about them into the records of the company at the first contact itself that
all transaction details automatically form part of the records. For example, a mobile
phone customer provides to the phone company, right at the start certain basic
information about him. Once the transaction commence, more and more details about him
become available to the company. In fact, the company details of his incoming and
outgoing calls are available to it. It also knows which value added services, promotional
schemes and cross selling deals were of interest to the customer. Similarly, a customer of
a credit card company provides the company a good amount of basic data about him \ and
once the transaction start, the company knows how much the customer spend through the
whole year, it will become an excellent database that is rich in content and capable of
being used to great advantage, not only by the companies concerned but also by others in
the marketplace setting out to acquire customers.
Comprehensiveness:
The customer database has to be comprehensive. In fact, it has to be so in two senses. It
must cover all the customers and it must have all essential information about them. In
practice, many data base do not meet these requirements in some others, essential details
about the customers such as income, size of the family, and the products (durables) he
already owns are not available. The reason is easy to discern. Though a lot of information
on customers and data flows are routine in the today’s business, many firms fail to
capture them.
Up-to-datedness:
Once the company puts a customer database together, it needs to keep updating it. After
all the customer is a very dynamic entity and when the marketing environment is also
highly competitive and fast changing. Updating customer data naturally that is up-to date
and relevant, minimizing the wastage arising out of obsolescence and data irrelevance is a
necessity for the firm.
Functionality:
The customer database should be functional as well. Though most companies appreciate
that customer database is crucial to CRM, many of them do not appreciate that database
must be functional. For instance, grouped by age, life style, employment, attitude and
loyalty the database must be capable of being sliced and diced at will. Once then it can be
described as functional.
CRM counters the above scenario and enable all the customer interacting executives to
have a single, cohesive view of the customer. The tools aggregate the business and
maintain the customer information in such a manner that ensures easy access for all. The
tools also tie together the multiple channels of communication with the customers such as
live chat through phone or e-mail. Hence, CRM is often described as the tool that
leverages technology for delivering superior value to customers.
The Following steps help to put the organization on the right path to CRM success:
when milestones are achieved, the same managers should be the first to strongly promote
the benefits being realized by the firm.
Components of CRM:
CA ICV
CR
IC
Components of CRM
CRM includes many aspects which relates directly to one another through :
Front Office Operations: Direct contact with customers. For example. Face to Face
meeting, Phone calls, emails, Online services etc.
Back Office Operations: Operations that ultimately affect the activities of the front
office (e.g. Billing, maintenance, planning, marketing, advertising, finance,
manufacturing etc.)
Marketing Encyclopedia:
This software serves as a database for promotion of the products. The material can be
routed to sales representatives. This can also be shown to the customers on request.
Business Relationships:
Interaction with other companies and partners such as suppliers/vendors, retail
outlets/distributors and industry networks (lobbying groups, trade associations).This
external network supports front and back office activities.
“CRM-Notes”
CRM is not just a technology but rather a comprehensive ,customer centric approach to
an organization’s philosophy of dealings with its customers.
Types of CRM:
There are several different approaches to CRM with different aspects. In general,
Customer Service, Campaign Management and Sales Force Automation (SFA) form the
core of the system (with SFA being more popular).
1. Operational CRM:
Operation CRM provides support to “Front Office” business processes. For example,
Sales Marketing and Service Staff. Interaction with customers is generally stored in
customer contact histories and staff can retrieve customer information as necessary. The
contact history provides staff members with immediate access to important information
on the customer (Product owned prior support calls etc) eliminating the need to
individually obtain this information directly from the customer. Reaching the customer at
right time at right place is preferable.
Operational CRM processes customer data for a variety of purposes:
Managing Campaigns
Enterprise Marketing Automation
Sales Force Automation
Sales Management System
Activity and Time Management
Quotation and Order Processing
Delivery and Order Fulfillment
Tele-marketing and Tele-sales
Customer Service and Support
Remote Access
2. Analytical CRM:
Sales Intelligence CRM is similar to Analytical CRM, but it is intended as a more direct
sales tool. Features include alerts sent to sales staff regarding
a) Cross selling/ Up selling / Switch selling opportunities
b) Customer drift
c) Sales Performance
d) Customer trends
e) Customer margins
f) Customer Alignment
5. Collaborative CRM:
Collaborative CRM covers aspects of a company dealing with customers that are handled
by various departments with in the company such as sales, technical support and
Marketing. Staff Members from different departments can share information collected
when interacting with customers. For example, feedback received by Customer support
agents can provide other staff members with information on the services and features
requested by customers. Collaborative CRM’s ultimate goal is to use information
collected by all departments to improve the quality of services provided by the company.
Collaborative CRM processes customer data for variety of purposes:
Enterprise Portals
Customer Access
Supplier Access
Personalisation
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