CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER RELATIONSHIP MANAGEMENT

GUIDED BY: Dr.JELSY JOSEPH

DIRECTOR, DEPT OF MANAGEMENT STUDIES &RESEARCH,

KARPAGAM UNIVERSITY,COIMBATORE

INTRODUCTION:

No organization is secure today unless its every action is processed through the customer's eyes. Today's businesses are facing fierce and too aggressive competition while operating in both domestic and global markets. Traditional marketing methods have failed to deliver results in recent times. Customer Relationship Management is the establishment, development, maintenance and optimisation of long-term mutually valuable relationships between consumers and organisations. The focus of relationship marketing is on developing long-term relationships and improving corporate performance through customer loyalty and customer retention.

Types/variations of CRM

There are several different approaches to CRM, with different software packages focusing on different aspects. In general,Customer Service, Campaign Management and Sales Force Automation (SFA) form the core of the systematic

Operational CRM

Operational CRM provides support to "front office" business processes, e.g. to sales marketing and service staff. Interactions with customers are generally stored in customers' 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 (products owned, prior support calls etc.), eliminating the need to individually obtain this information directly from the customer. Reaching to the customer at right time at right place is preferable.

Operational CRM processes customer data for a variety of purposes:

Managing campaigns Enterprise Marketing Automati on Sales Force Automation Sales Management SysteM

Analytical CRM

Analytical CRM analyzes customer data for a variety of purposes:

Designing and executing targeted marketing campaigns Designing and executing campaigns, e.g. customer acquisition, cross-selling up-selling, addon-selling Analyzing customer behavior in order to make decisions relating to products and services (e.g. pricing, product development) Management information system (e.g. financial forecasting and customer profitability analysis)

Analytical CRM generally makes heavy use of data mining and other techniques to produce useful results for decision-making. It is at the analytical stage that the importance of fully integrated CRM software becomes most apparent. Logically speaking, the more information that the analytical software has available for analysis, the better its predictions and recommendations will be.

Sales Intelligence CRM

< p>Sales Intelligence CRM is similar to Analytical CRM, but is intended as a more direct sales tool. Features include alerts sent to sales staff regarding:

Cross-selling/Up-selling/Switch-selling opportunities Customer drift Sales performance Customer trends Customer margins Customer alignment

Campaign Management

Campaign management combines elements of Operational and Analytical CRM. Campaign management functions include:

Target groups formed from the client base according to selected criteria Sending campaign-related material (e.g. on special offers) to selected recipients using various channels (e.g. e-mail, telephone, SMS, post) Tracking, storing, and analyzing campaign statistics, including tracking responses and analyzing trends

Collaborative CRM

Collaborative CRM covers aspects of a company's dealings with customers that are handled by various departments within a company, such as sales, technica l 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. CRM also plays a role of data distributor within customers, producers and partners. Producers can use CRM information to develop products or find new market. CRM facilitates communication between customers, suppliers and partner by using new information system such email, link and data bank.

Consumer Relationship CRM

Consumer Relationship System (CRS) covers aspects of a company's dealing with customers handled by the Consumer Affairs and Customer Relations contact centers within a company. Representatives ha ndle in-bound contact from anonymous consumers and customers. Early warnings can be issued regarding product issues (e.g. item recalls) and current consumer sentiment can be tracked .

Benefits of CRM

The benefits of customer relationship management are abounding. It allows organizations not only to retain customers, but enables more effective marketing, creates intelligent opportunities for cross selling and opens up the possibility of rapid introduction of new brands and products. To be able to deliver these benefits, organizations must be able to customize their product offering, optimize price, integrate products and services and deliver the service as promised and demanded by the customer base. Keeping the customer happy is obviously one way of ensuring that they stay with organization. However, by maintaining an overall relationship with customer, companies are able to unlock potential of their customer base and maximize contribution to their business. Based on successful CRM implementations, the following benefits seem reasonable:

Increased sales volume: Increased sales result from spending more time with customers and gathering more and more information about their preferences about the products and services. Increased margin: Increased margin resulting from knowing customers better, and providing a value product on discounting prices. Improved customer satisfaction ratings: Customer will be more satisfied if he finds the company to be more responsive and better in touch with their specific needs. Decreased marketing administrative costs: Since the company has specified its target segment customers, it knows their needs better so it is not wasting unnecessary time and money which result into decreased marketing costs.

CUSTOMER Strategy

Several CRM software packages are available, and they vary in their approach to CRM. However, as mentioned above, CRM is not just a technology but rather a comprehensive, customer-centric approach to an organization's philosophy of dealing with its customers. This includes policies and processes, front-of-house customer service employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology toward the broader organizational requirements.

The objectives of a CRM strategy must consider a company�s specific situation and its customers' needs and expectations. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments, improving customer retention , improving product offerings (by better understanding customer needs), and by identifying the organization's most profitable customer

CRM strategies can vary in size, complexity, and scope. Some companies consider a CRM strategy only to focus on the management of a team of salespeople. However, other CRM strategies can cover customer interaction across the entire organization. Many commercial CRM software packages provide features that serve the sales, marketing, event management, project management, and finance industries.

From this perspective, CRM has for some time been seen to play an important role in many sales process engineering effort.

Implementation issues

Many CRM project "failures" are also related to data quality and availability . Data cleaning is a major issue. If a company's CRM strategy is to track life-cycle revenues, costs, margins, and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional d atabases such as sales, manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated, comprehensive system in place with well-defined structures and high data quality. Data from other systems can be transferred to CRM systems using appropriate interfaces.

Because of the company-wide size and scope of many CRM implementations, significant pre-planning is essential for smooth roll-out. This pre-planning involves a technical evaluation of the data available and the technology employed in existing systems. This evaluation is critical to determine the level of effort needed to integrate this data.

Equally critical is the human aspect of the implementation. A successful implementation requires an understanding of the expectations and needs of the stakeholders involved. An executive sponsor should also be obtained to provide high-level management representation of the CRM project.

An effective tool for identifying technical and h uman factors before beginning a CRM project is a pre-implementation checklist. A checklist can help ensure any potential problems are identified early in the process.

The Future of CRM

With the increased penetration of CRM philosophies in organizations and the concomitant rise in spending on people and products to implement them, it is clear we will see improvements in how companies work to establish long-term relationships with their customers. However, there is a big difference between spending money on these people and products and making it all work: implementation of CRM practices is still far short of ideal. Everyone has his or her own stories about poor customer service and e-mails sent to companies without hearing a response. Despite several years of experience, Web-based companies still did not fulfill many Christmas orders in 2000 and customers continue to have difficulties returning unwanted or defective products. More companies are recognizing the importance of creating databases and getting creative at capturing customer information. Real-time analyses of customer behavior on the Web for better customer selection and targeting (e.g., Net Perceptions) which permits companies to anticipate what customers are likely to buy. Companies will learn how to develop better communities around their brands giving customers more incentives to identify themselves with those brands and exhibit higher levels of loyalty.

One way that some companies are developing an improved focus on CRM is through the establishment or consideration of splitting the marketing manager job into two parts: one for acquisition and one for retention. The kinds of skills that are need for the two tasks are quite different. People skilled in acquisition have experience in the usual tactical aspects of marketing: advertising, sales, etc. However, the skills for retention can be quite different as the job requires a better understandi ng of the underpinnings of satisfaction and loyalty for the particular product category. In addition, time being a critical scarce resource makes it difficult to do an excellent job on both acquisition and retention. As a result, some companies have appointed a chief customer officer (CCO) whose job focuses only on customer interactions.

CEM, Customer Experience Management. . Marketing managers for frequently-purchased products like toothpaste are not as likely to find CRM investments paying out to the extent they will for, say, computer servers given the differences in difficulties of reaching customers and the profit margins of the respective products. However, even companies in the former areas are using the Web to attempt to differentiate their brands from the myriad others appearing in supermarkets and discount stores. This is some evidence that there are perhaps few companies that cannot benefit from the CRM structure provided in this paper.

Conclusion

Customer relationship management does not enable a quick win. It is a long-term approach that has to be adopted at a strategic level. Whilst the value of customer relationship management has been identified by organizations, they are yet to look at the bigger picture and understand all of associated benefits that would enable their business strategies to be successful. Those responsible for delivery are perhaps the most informed about these strategic benefits yet the transformation is long-drawn-out process. The competencies required to deliver these customer benefits are: to deliver on its service promise, integrate products and service channels effectively, customize products & service and their respective prices, create opportunities for cross selling and delivery mechanisms for the onward promotion of these products and services and reduce the gestation period to market by allowing quick and effective introduc tion of new products and services.

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