CRM Relationship, Theories - 2
CRM Relationship, Theories - 2
CRM Relationship, Theories - 2
Quality
of
Life
is
The Quality of Life is
the
the Quality
Qualityof
ofYour
Your
Relationships
Relationships
- -Antony
Antony
1.
1. Customer
Customer
Relationship
Relationship
Management
Management
Robbins
Robbins
Customer Relationship
Management
UNIT I: CRM
FUNDAMENTAL
CRM Definitions,
Objectives to Understand
Explosion of CRM in
Marketing
RELATIONSHIP IN BUSINESS
THEORITICAL PERSPECTIVE
RELATIONSHIP IN
BUSINESS
III. Equity Theory: John Stacey Adams (1965)
Relations developed & maintained on distribution
proportion of rewards to the costs.
Individuals Outcomes
Outcomes
------------------------------ =
------------------------------------Individual's own inputs
inputs
Relational partners
Relational partners
STAGES
Six
Stage OF RELATIONSHIP
Model:
Relationships
development
(Devito, Joseph
takes time
1993) IncrIneavoselvdemcoennt:ta
C
ct
a
t
on
frequency
Intimacy:
Depth of
Relationsh
ip
EB
R
Relationship
Stages
N
O
D
so
l
ut
io
REPAIR
D
is
ct
Marketers try
Det
to
erio
rati
on
understand &
exploit
each stage of
relationship for
cross-selling &
TYPES OF RELATIONSHIP
RELATIONSHIP:
Different Forms & Types
Different time & Circumstances
KARYESHU DASI, KARANESHU MANTRI,
BHOJESHU MATA, SHYANESHU RAMBHA,
ROOPESHU LAKSHMI, KSHAMAYESHU
DHARITRI,
SATKARMA NARI, KULDHARMA PATNI
TYPES OF RELATIONSHIP
Parent Child
Teacher Student
Leader follower
Comrade-at-arms
Fellow-enthusiast
Confident
Idol to be worshipped
Casual Friend
Soul mate
Old Flame
Seek out to escape
from monotony
SCHOOLS OF THOUGHT ON RM
Anglo-Australian Approach:
RM as a Confluence
of Quality Mgmt, Customer relationship economics &
Service marketing concepts.
Nordic Approach: a Confluence of interactive theory,
customer relationship economics and service marketing
concepts.
North American Approach: Contrast
Organizations environment decides the relationship
between buyer and seller.
Changing
From:
Landscape
To:
Product Supplier
Solution Provider
Multipliers
Supplier
Functional
Orientation
Vertical Integration
Preferred Partners
Market
Segmentation
Sales People as
Relationship
Managers
Customer
Customer
Segmentation
Cross Functional
Teams as
Relationship
Customer
Managers
Loyalty/commitment
Value Chain
Orientation
Outsourcing
A shift in thinking
SUCCESS
CRITERIA
MARKETING
One Off
Exchanges
Short-term
Focus
Mass
MARKETING
Ongoing
Exchanges
Long Term
Focus
Personal
Isolated Market
Research
Mass
/Segmented
Marketing
Market Share
Ongoing
Dialogue
Personalized
Marketing
Mind & Heart
Share
Evolution of Customer
Relationships
Hig
h
Relations
hip
Orientati
on
Low
PreIndustrial Era
Industrial
Era
Information
Era
Relationship
Product
Relationship
Why to Adopt
Demand Side
CRM
Rising customer expectations
Supply Side
Technological advancement
Production: CAD/CAM, JIT etc.
Distribution: Computer Aided
Logistics (CALS)
E-commerce
EDI for facilitations
Declining cost of ICT supporting
technology led CRM initiatives
Revenue Distribution exponential then
Criticality of CRM
Non-traditional competition
Market maturity
Whats a relationship?
Defining CRM
Defining CRM
contd
Common: Issues
Integration ofof
world economy lowering
Criticality
barriers
Emergence of trading blocks
CRM
Non-traditional competition
CRM CYCLE
Obtain Info.
From
Customers
Raise
Profitabilit
y
Acquire
New
Customers
CRM
CYCLE
Create
Superior
Customer
Value
Build Loyal
Customers
Retain
CRM
CYCLE
Cross sell
Up-sell
STAKEHOLDERS IN CRM
Employe
es
Custom
ers
Partne
rs
Suppli
ers
Significance of CRM
Suppli
ers
Marke
ts
Intern
al
Marke
ts
Custom
er
Markets
Recruitm
ent
Markets
Referr
al
Marke
ts
Influenc
e
Markets
Shared
CoValue
partnerin
Relationship
g
Experienti
al Mgmt.
Operation
al
Excellenc
e
Cost
Mgmt.
Emotional Connect
Relationship
Premium
Value
Chain
Relationship
Hierarchy
Satisfaction Based
Relationship
Transactional
Relationship
Basic
Minimu
m
Committed
Buyer:
CopartnerinChampion &
Spokesperson
g
for brand
Experienti
Likes the Brand:
al Mgmt. Considers it as a friend
Operation
al
Excellenc
e
Cost
Mgmt.
Premium
Value
Chain
LOYALTY
PYRAMID
Satisfaction Buyer:
No reason to break off
relations but will
switch on inducements
SWITCHERS:
No Feeling for Loyalty
Basic
Minimu
m
Types of CRM
Proactive
Customer Data Analytics
Interactive
Customer Facing Business
Processes
Responsive/
Reactive
Customer
Interactive
Management
CRM
Channel partners
Mid level Info
Transformation
IC
COLLABORATI
VE through
2 way Interaction
YT
AL
AN
OP
ER
AT
AL I O
N
C
on
ta
ct
C
ha To Mg
nn ol
m
t
e
C
l
M
on To
te ol gm
nt
t.
M
To
ol gm
t.
AL rn
te ery
at
P cov ct
u
s
Di rod sis
P a ly er
m
An sto sis
u
y
C al g &
An tin ion
t
r
or
S acta me
Fr usto ue n
C al tio
V
ua
al
Ev
TYPES
OF
CRM
1. Operational CRM
Front office CRM: Direct Interaction b/w
customer & marketer via customer
touchpoint (POS, Call centers, web etc.).
Face to face touchpoints: Sales/Service/Chan
nel/Events/Stores/Promotions
Database driven touchpoints: Telephones/Em
ail/Mail/SMS/Fax/Loyalty Cards/ATMs
Mass Media: Advertising/PR/Websites
2. Collaborative CRM
3. Analytical CRM
Attributes of CRM
- Reliability
- Responsiveness Competence
- Access
- Courtesy
- Communication
- Credibility
- Security
- Understanding &
- Tangibles
- Psychology related
CRM Key
Issues
Shifting
Paradigm: from Transactions to
RM
Focus: Maximizing LCV of target
Customers
Develop & enhance relations with 6 key
markets.
Goal
of CRM
Customer
Quality,
Build Strong,
LongService
Term && Marketing:
closely
related.
Valuable
relationship with
chosen customers
Enhanci
Get closer to these customers
at
ng
every point of contact with them
Retainin
g
Satisfyin
g
Attractin
Wilson (2002)
CRM SUCCESS
FACTORS
Siebel (2004)
Integration of b/o.
Top Management
System Integration
Knowledge Mgmt.
Alignment of IT
Benefits of
Customers:
profitable over time
CRM
Marketing Benefits CRM:
promotions
Productivity gains: low cost media, improved
targeting & higher conversion rates
& varies
Information, knowledgedifferentially
customized
KEY
KEYTO
TORELATIONAL
RELATIONALLONGIVITY
LONGIVITY
Conceptual
ConceptualClarity,
Clarity,Emotional
EmotionalMaturity
Maturity&&
Mental
MentalStability
Stability
THERE
IS
ONLY
ONE
BOSS
THE
THERE IS ONLY ONE BOSS THE
CUSTOMER
CUSTOMER
Who
Whocan
canfire
fireeveryone
everyonefrom
fromthe
theChairman
Chairmanon
on
down,
down,
Only
those
figuratively
&
literally
will
by
simply
spending
his
money
somewhere
those
figuratively
& literally
will
byOnly
simply
spending
his money
somewhere
survive,
else.
survive,
else.
.Sam Walton,
who
became
attached
to
their
customers
W/o
a
doubt,
to
be
successful
in
future,
the
.Sam
Walton,
who
became
attached
to
their
customers
Founder
WAL-MART
W/o a doubt, Founder
to be
in
future,
the
Tomsuccessful
Peters
WAL-MART
game
is
CRM.
If
you
Tomare
game is CRM. If you Peters
aresuccessful
successfulat
atCRM
CRM
game,
game,you
youare
areable
ableto
toacquire
acquiremore
more
customers
customers&&convert
convertthem
themon
onother
other
products.
products.
Success
in
CRM
isisthe
only
game
in
town
Success
in
CRM
the
only
game
in
town
CRM
Comprehension
&
CRM
Comprehension &
moving
movingforward
forward
CRM COMPREHENSION
Typical Service Process
Identify
Customers
comfort
level
SUCCESS
Leverage
Technology
Emphasis on
sustained
CRM
practice
Train
Employees
Service
Innovation
CRM COMPREHENSION
1.
MODEL
3.Perceived
C
MARKETIN
R
G
M
PROGRAM
ME
Offers
Tangibles &
Intangibles
(7Ps),
Service
Delivery,
People
behaviour,
Grievance
handling,
C
Customers
R
handling
Performance
PP>E Customers
Satisfaction
Repeat Purchase, Positive
Referral, Cross selling &
CUSTOMERS
Up selling
COGNITIVE
ABILITY
PP<E Customers
Dissatisfaction
4.
COMPETITO
RS
OFFER
2.Customers
Expectations
Customers
Evaluation
Process
Components of CRM
Programme
Customer
Satisfaction
Customer
Information
Customer
Knowledg
e
Customer
Data
Customer
Informati
on
CRM PROCESS
Historical Perspective
Unorganized &
Unstructured
More of Individual
Discretion
Restricted to Small
Group of Customers
Confined to Specific
Trade
No Technological
Support
10
M
R
.C
c
a
r
5. Employee Participation in
CRM Design
6. Employee Motivation for
Effective Implementation
ti c
3. Offer Customization
l
a
Ev
on CLV
2. Customer Profiling
n
o
i
t
a
u
Summary
ASSIGNEMENT - I
Any Questions?
THANK YOU!