Customer Relationship Management(CRM)

What is CRM?
Customer relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
( ref: Customer relationship management- Emerging concepts, tools and applications by Jagdish N seth)

The purpose of CRM

The focus [of CRM] is on creating value for the customer and the company over the longer term . When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs . CRM enables organisations to gain competitive advantage over competitors that supply similar products or services

Information Technology and CRM

Technological approaches involving the use of databases, data mining and one-to-one marketing can assist organisations to increase customer value and their own profitability

This type of technology can be used to keep a record of customers names and contact details in addition to their history of buying products or using services

This information can be used to target customers in a personalised way and offer them services to meet their specific needs

This personalised communication provides value for the customer and increases customers loyalty to the provider

Examples of CRM
Phone calls, emails, mobile phone text messages, or WAP services : Having access to customers contact details and their service or purchase preferences through databases etc can enable organisations to alert customers to new, similar or alternative services or products For ex: When products are purchased online via flipkart.com, the website retains the customers details and their purchase history. The website regularly send emails to previous customers to inform them of similar upcoming products or special discounts. This helps to ensure that customers will continue to purchase products from Flipkart.com in the future.

Why do CRM initiatives fail?

most executives simply dont understand what they are implementing Flawed assumption that CRM is a software tool that will manage customer relationships for you CRM is the bundling of customer strategy and processes, supported by the relevant software, for the purpose of improving customer loyalty and, eventually, corporate profitability

Implementing CRM before creating a customer strategy

CRM only after a customer strategy is implemented. Customer strategy helps CRM to function better. Segmentation analysis helps to achieve specific market goals

The New York Times

First research in 90s gave results contradictory to their traditional values. So more targeted research on core and potential customers. Understood what potential subscribers really need. Led to increasing circulation.

PERIL-2
Rolling Out CRM Before Changing Your Organization to Match Installing CRM technology before creating a customer-focused organization is perhaps the most dangerous pitfall. 87% of CRM failures- Due to lack of adequate change management. Source: on-line resource center CRM Forum

Prerequisites to rolling out CRM

Revamp the key business processes that relate to customers, from customer service to order fulfillment. Organization and its processesjob descriptions, performance measures, compensation systems, training programs and so onhave to be restructured in order to better meet customers needs See the need for changes to internal structures and systems

Examples

Marketing strategy Vs Technology

Wrong Assumption: CRM has to be technology intensive High tech solution is better than low tech one Right way Based on customer strategy. Can be a low/mid/high tech

Low Tech-High Tech

Grand expeditions- Continuous study for identification of simple and effective low tech pratices that boost customer relation Square D -Customer Strategy that called for high tech solutions to secure customer loyalty

CRM can help

Acquiring the right customers Crafting the right value proposition Instituting the best processes Motivating employees Learning to retain customers

Stalking, Not Wooing, Customers

How did Dallas Morning News overcome the failure?

Learning from the failure.

Example of BMC BMCs managers didnt research what customers wanted Non-involvement of the Top management. Tapped the Vice-President and the manager of North America.