CRM Customer Relationship Management

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Pre Requisites for Implementing CRM
 CRM is ultimately a philosophy of how your business
processes are organized
 There is a technical side of it, but the emphasis is how
well you have integrated the customer experience into
your entire business process
 It engenders business change and is one of the goals of
CRM
 Is an enterprise-wide initiative and aims at integrating
the front-end customer facing systems with the back-
end systems that actually deliver the product and value
to the system.


Contd.
 It involves not only the top management but the enterprise
as a whole with all the functional departments
 Requires change management in the following aspects:
 Processes
 Goals
 Orientation
 Focus
 Technology
 Performance and effectiveness

CRM Implementation Roadmap
 Helps the firm to develop a positive cultural
acceptance of CRM
 Enables the firm to deal with organizational changes,
new businesses, customer needs and CRM
technologies

Stages of CRM implementation Roadmap
 Scenario analysis
 Purpose definition
 Business planning
 Process design
 Technology and vendor selection
 Solution development
 Implementation
 Measurement
Scenario Analysis
 This involves evaluating the environment
 What is the business of the firm?
 Who are its customers?
 Where is the firm placed with respect to its competitors?
 What is the current business scenario and how is it likely to
evolve in the future in short, medium and long term?
 Based on this the firm can define what it needs to
improve its performance against its competitors in the
market by developing relationship with the customers

Purpose definition
 After scenario analysis the firm needs to define its
purpose for going in for CRM
 Firms generally go for CRM to build more effective,
efficient and long lasting relationships with their
customers
 The company should not merely go for this because
of their competitors or because it is the latest
technological trend
Planning
 Here CRM’s overall objectives at the department and
enterprise level need to be defined
 This includes documentation of high level CRM business
goals in the form of business document that forms the focal
point of strategy formulation
 Also includes details of what needs to be done and who
would be responsible for what
 Changes in following areas are expected:
 Business focus
 Organizational structure
 Business metrics
 Marketing focus
 Technology
Process Design
 Here the firm looks at the existing processes and try to
redesign them to make them more customer centric
 Also effectiveness and efficiency of these processes need
to be considered at this stage
Technology and vendor selection
 All the available technologies and vendors are evaluated at
this stage
 Technology is evaluated on some of the parameters like:
 Compatibility with the existing system
 Capability of the solution in terms of functionality,
 Service capabilities of the vendors


Solution Development
 Includes the following aspects:
 Customization of features
 Development of new features required
 Process integration and testing
 Design of the database
Implementation
 Here finally the system is put in place
 System is deployed and documentation is done
properly for future reference
 End users need to be trained
 Solution needs to be sold internally so that it gets
positive response from the employees

Measurement
 Here development of metrics to measure the
performance of CRM solution and comparing with the
desired performance is done
 Success is measured in terms of how well CRM has
been able to solve business problem
 Should also include user feedback to improve the
usability of CRM and business effectiveness
Technological Issues
 Functionality
 Flexibility in incorporating changes
 Customization
 Scalability
 Fit with existing infrastructure (legacy system)
 Fit with global best practices
 Upgradeability
 Commercial impact
 Compatibility with other CRM solutions
 Degree of integration


Vendor Issues
 CRM expertise
 Expertise in the industry
 Geographical implementation experience
 Focus of vendor on CRM
 Credentials of the vendor like financials, client list, life
history etc
 Vendor’s understanding of firm’s business problems
 Preferred implementation partners
 Technical handholding expected
 Training and maintenance

Requirement of CRM Program
 A clear understanding of and commitment to the
company’s customer focus
 Vigilant adherence to detailed goals
 Commitment from both executives and line workers
 And a constant awareness of the customer’s
viewpoint
Contd.
 It is difficult to develop CRM strategy without an
understanding of the value of the customers and their needs
 A company should have strategic approach to treat
different customers differently
 Without a proper CRM strategy, it will be difficult for the
company to target its limited resources at its most valuable
customers

Issues to be addresses by CRM vision and strategy
 Which customers to target?
 How to deal with rapidly increasing channel fragmentation and
media complexity so that it has a positive effect on company’s
communication with its customers
 How should company balance quality of experience, cost to
serve and profitability of the customer
 What is the appropriate level of CRM integration for the
company
 How to get the customer insight on company’s products and
initiatives
 What should be the corporate strategy for unprofitable
customers


CRM across Company Functions
 Marketing – Account management expertise
 Research & Development – Specifications that define
requirements
 Logistics – Knowledge of customer service
requirements
 Production – Manufacturing strategy
 Purchasing – Sourcing strategy
 Finance – Customer Profitability Reports
Measurement of CRM success
 A research study conducted illustrates the following
four overreaching measurements for CRM success
 CRM’s ability to impact corporate strategy (25%).
 Successful technology integration (23%)
 Enhanced strategic partnership (20%)
 Assimilation of CRM related technologies (18%)
CRM Business Plan
 Includes several discrete components that, when
combined explain the value proposition and tactical
implementation plan for CRM
 Also includes:
 The requirement for new technologies
 The impact on existing technologies
 Ongoing support and maintenance required
 CRM alternatives
Contd.
 The planning begins with development of strategy followed
by selection of technology to support the strategy
 The acquisition and implementation of technologies should
allow the company to achieve its vision for CRM
 This can be accompanied by effective change management
and technology enabled evolution

Issues to be addressed before
implementing CRM
 Are various customer touch points (access tools) well
integrated?
 How well do you empower customer service employees
with the ability to answer customer questions?
 How well does your customer support assist people who
need help with your website or product?
 How well are your internal departments connected? Are
they able to ensure cross- dissemination of information
quickly and efficiently?
Implementing CRM Strategy
 If we implement CRM without a plan, its likely to
fail.
 To make the road ahead clearer and enable us to
accomplish our goals, we need to choose among the
four major CRM strategies
 Enterprises seldom limit themselves to just a single
CRM strategy
 However, based on an enterprise's goals and culture,
one of four strategies is likely to predominate
Contd.
 Gartner defines it as a business strategy designed to
optimize profitability, revenue and customer
satisfaction.
 So, enterprises will pursue a wide variety of CRM
strategies.
 One of the fallacies concerning CRM is that it
 looks the same at all enterprises.
 In reality, enterprises tend to pursue four different
"flavors" of CRM, depending on which of four
strategies they are emphasizing
Strategy No. 1: Extend Depth and Breadth
of Relationships
 Most-common strategy that enterprises pursue, often
without overtly thinking about it.
 The goal is to get a larger share of the customer
relationship.
 Common terms include "up sell" and "cross-sell."
 The presupposition is that the enterprise is
underrepresented in the customer's thinking, and that it can
expect a larger "fair share" of the relationship
Contd.
 Information on the state of the current relationship is
important to this strategy, as is the upside potential
and the levers that influence the customer.
 Hence, it is extremely data-intensive and data-
dependent.
 Enterprises that emphasize this strategy will place a
heavy burden on related IT initiatives, such as data
warehousing and business intelligence
Typical Systems Used
 Campaign management systems (CMSs),
 Analytics/business intelligence and
 Lead management
Traditional Metrics
 Cross-sell ratio,
 Close rate,
 Average sales price,
 Average increase in order size,
 Involuntary attrition rate and cost,
 Cost per lead,
 Average order size and
 Response rate
Pros & Cons of This Strategy
 Pros:
 Easy connection to revenue;
 High payback
 Cons:
 Data-intensive;
 Requires systems infrastructure, which often
requires retraining the marketing department
Strategy No. 2: Reduce Delivery Channel Costs and
Create Barriers to Entry
 The idea here is to move customers and transactions
away from high-cost channels (the labor-intensive
channels) to low-cost channels (such as the Web).
 Is aimed at using CRM to make the enterprise more
efficient, so much of the focus is on such areas as
revenue, channel costs, detailed transaction data and
changes in usage patterns over time.
Typical Systems Used
 E-service/self-service,
 Interactive Voice Response (IVR) and
 Marketing Resource Management (MRM)
Traditional Metrics Used
 Cost per transaction,
 Revenue per customer,
 Revenue per new customer,
 Number of channels used,
 Transaction errors per agent and
 Average acquisition cost
Pros & Cons
 Pros:
 Direct impact on bottom line; builds competitive advantage
 Cons:
 May conflict with customer desires;
 Requires a multi- touch point strategy; and may have
unintended consequences — for example, using Web self-
service to offload a call center can cause remaining calls to
become longer and more complex, which results in a need
for more agents of higher caliber to handle more-complex
questions
Strategy No. 3: Reinforce Brand
 People claim that, in the age of CRM, the brand is
dead.
 In fact, exactly the opposite is true.
 The brand has become more important, because CRM
is the fulfillment of the promise created around the
brand.
 In other words, a brand promises customers.
 CRM is the ability to make that promise a reality.
 This strategy emphasizes the handoff from branding
media (such as television) to more-interactive media
for example, the call center
Typical Systems Used
 Call center,
 Sales force automation (SFA),
 Opportunity management,
 E-commerce and
 Unassisted selling
Traditional Metrics
 Abandonment rate,
 Once-and-done rate,
 Pipeline forecast volume,
 Calls per day,
 Revenue per salesperson and
 Number of new customers
Pros & Cons
 Pros:
 Synergistic with other marketing goals;
 gives consistency for customers
 Cons:
 More qualitative in nature;
 requires a long-term view of the relationship
Strategy No. 4: Create Customer
Satisfaction and Loyalty
 The goal here is to create happier customers.
 It is usually done in the area of customer service and
support, but it may also include operational systems
that enable customers to have access to needed
information.
 A fundamental of this school of thought is that every
interaction with the customer does one of two things:
creates satisfaction or destroys it.
 This strategy works to ensure that the interactions go
well
Typical Systems Used
 Billing and partnership relationship management
(PRM) systems
Traditional Metrics
 Customer satisfaction score,
 Average duration of relationship,
 Profit per time period,
 Voluntary defection rate,
 Lifetime value and
 Quote-to-close cycle time
Pros & Cons
 Pros:
 High correlation between satisfaction and
longevity;
 Builds on the back of necessary systems
 Cons:
 Extremely qualitative, so difficult to quantify;
 hard to make links between satisfaction and loyalty

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