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Customer Relationship Management
A concept or strategy to stay
in touch and solidify relations with customers and at the same time reducing cost and enhancing productivity and profitability in business CRM: An emerging trend • It can be defined as a business philosophy and set of strategies, programs and systems that focus on identifying and building loyalty with a marketer’s profitable customers • A business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers through ‘one-to-one’ marketing • CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers through an approach of ‘affinity marketing’ • It is a comprehensive approach which provides seamless integration of every area of business that touches the customer viz. marketing, sales, customer services and field support through the integration of People, Process & Technology CRM Cycle: A continuous Process CRM is a continuous process of optimizing interactions with the customer and Differentiate seeking new opportunities to increase sales Enforce CRM by the following steps: Identify Target Market Collect & Store Data Open Communication Channels Analyse the Sales Data Personalise Interaction with Customers Identify Integration Interact
The CRM Cycle consists of 4 stages (also called as IDIC process)
1. Identify Customer 2. Analyse and differentiate, behaviour-wise 3. Interact to know their individual preferences 4. Customise plan to optimise revenues Customize Benefits to Customers 1. Customer service is Improved 2. Personalized or one-to-one service is provided 3. Customer's needs are promptly responded 4. Customer segmentation offers proper identification 5. Customization of marketing can maintain customer interests 6. Multichannel integration shows the creation of customer value 7. Time saving in interacting with customers more frequently 8. Improves customer knowledge Benefits to Company 1. Enhanced ability to target profitable customers. 2. Integrated assistance across channels 3. Enhanced sales force efficiency and effectiveness 4. Improved pricing 5. Customized products and services 6. Improved customer service efficiency and effectiveness 7. Individualized marketing messages also called campaigns 8. Connect customers and all channels on a single platform Variables under analysis in CRM Relationship Intelligence, or awareness of the variety of relationships a customer can have with a firm, may be assessed in terms of the following variables 1. Customer’s Needs 2. Customer’s Response 3. Customer Satisfaction 4. Customer Loyalty 5. Customer Retention 6. Customer Complaints 7. Customer Service Components of CRM Systems CRM systems may include some of the following: • Data warehouse technology, used to aggregate transaction information, to merge the information with CRM products, and to provide key performance indicators. • Opportunity management which helps the company to manage unpredictable growth and demand, and implement a good forecasting model to integrate sales history with sales projections. • CRM systems that track and measure marketing campaigns over multiple networks, tracking customer analysis by customer clicks and sales. • CRM software available as Software as a Service (SaaS), (delivered via the internet and accessed via a web browser instead of being installed on a local computer by paying a recurring subscription fee to the software vendor) • For small businesses a system to integrate emails, documents, jobs, faxes, and scheduling for individual accounts. • CRM systems for e-Commerce, focused on marketing automation tasks • Customer-centric relationship management (CCRM) which focuses on customer preferences through individual, interactive relationships • Systems for non-profit and membership-based organizations to track the CRM & CLC CRM Network Customer Database: A wide use in CRM • An organized collection of comprehensive information about individual customers is called ‘Customers Database’ • The process of building, maintaining and using this database with other database is ‘Database Marketing’ • Companies are also capturing information through touch-points to maintain ‘Data warehouses’ from internal and external sources to draw the inferences about the customers • Through ‘Datamining’ marketers extract useful information from the mass of data to detect trends, segments and individual needs • Database helps in identifying the prospects, deciding on customer- wise offers and thus deepening the costumer loyalty • It helps in avoiding serious customer mistakes • Big Data will minimize the segmentation and force the marketer to understand each customer as an individual for customization Data enabled CRM Customer Lifetime Value (CLV) (Financial Value of a customer) • Customer Profitability CLV Measurement • Customer-Product Profitability Analysis Customer Lifetime Value (CLV) Calculation of CLV: 1. Calculate average purchase value: in a time period by the number of purchases (usually one year) 2. Calculate average purchase frequency rate 3. Calculate customer value: by multiplying 1 with 2 above 4. Calculate average customer lifespan: by averaging the number of years a customer continues 5. Calculate CLV: by multiplying 3 with 4 above Increasing Customer Lifetime Value: • Reducing the rate of Customer defection • Increasing the longevity of the customer relationship • Enhancing the growth potential of each customer through ‘share-of- wallet,’ cross-selling and up-selling • Making low-profit customers more profitable or terminating them • Focusing disproportionate effort on high-value customers • Create a reward/ incentive/ coupon program for deepen their loyalty Improving CRM within a Firm Do it at all levels: • Strategic CRM by development of a customer-centric business culture • Operational CRM with single customer view, it has 3 components: Sales force automation Marketing automation Service automation • Analytical CRM to analyse customer data collected through multiple sources through data mining, correlation, pattern recognition, etc. • Collaborative CRM to incorporate external stakeholders Arrange, for the organization, for: Analysing the information, Employee Training, Application of new technologies, Call Centres, Contact-centre automation, Social Media and Location-based services CRM Systems can also be applied to B2B transactions CRM Process: to uphold A Roadmap to Updating CRM • Vision: What will CRM look like? • Culture: A customer-driven sales process • Journey: A well-documented map of the customer experience • Education: Creating training material for internal teams and any third-parties involved • Communication: The progress and documentation sharing • Leadership: To fix the leader and the responsibilities • Value: to communicate the benefits • Technology: To select vendor platform • Implementation: A documented plan of implementation • Success: The KPIs to measure the success Emerging Trends in CRM 1) Customer Experience: ensuring that you leave them with a good impression and they are thrilled 2) Automation: sales processes get faster, more accurately, and more effectively 3) Artificial Intelligence: playing a vital role by offering: a. Easier data ingestion and retrieval b. Sentiment analysis capabilities c. Better data integrity d. Predictive lead scoring (for evaluating the sales leads) e. Personalized solutions/recommendations 4) Mobile: a requirement that sales reps may use CRM even Emerging Trends in CRM Contd. 5) Social Media: expands the reach by connecting with the prospects with social campaigns 6) User-friendly: to ensure the use of software by sales staff and customers quickly and easily 7) Omni-channel: includes continuing the customer lifecycle in each channel when customer abandons a cart on one channel 8) Immersive: to put the customers right in the showroom or in customer’s living room with virtual reality 9) Empowering sales managers/ sales force for better roles 10) Novel CRM trends will give marketing and sales professionals all the required data inside their inbox Conclusion 1) Hyper-personalization supports true one-to-one interactions in CRM, and 2) Customer experience is predicted to become the top brand differentiator in the coming days