Customer Relationship Management – Study Material

Customer Relationship Management â€Å"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 customers†. Importance of CRM * Identifying customer needs. * Identifying untapped business potential. * Identify strong & weak points of suppliers. * Benchmarking to achieve global excellence. * Help in rediscovering the customers and understanding them * Identify field requiring new technology and development. * Provide feedback to the suppliers on its total operations. Action plan to make organization customer centric. Goals of CRM * Build long term and profitable relationship with suitable customers. * Getting closer to those customers at every point of contact with them Enablers for the growth of CRM (Pg : 17-20 in the pdf you sent) * Emergence of service economy. * Global orientations of business. * Emergence of market economy. * Aging population of econ omically advanced economies. Criticality of Customer relationship * Non traditional competition * Market Maturity * Misalignment between revenue & profitSchools of Thoughts on CRM 1. Anglo Australian Approach – Explains relationship marketing as a Confluence (meaning : process of merging) of Quality management, customer relationship economics and service marketing concepts. 2. Nordic Approach – Explains relationship marketing as a Confluence of interactive theory, customer relationship economics and service marketing concepts. 3. North American approach – â€Å"Contrast† Organizations environment decides the relationship between buyer and seller. Fig : Nordic Approach Fig : Anglo Australian approachBrand Relationship Management – is as the process of establishing, maintaining and developing relationship between brand and its consumers. BRM Process Brand Loyalty – defined as the customers commitment to the brand and make repurchase over time. Ladder of Loyalty 1. Partner – An advocate who is actively involved in decisions of the company. 2. Advocate – A supporter who proactively works to improve the products & services of company. 3. Supporter – A client becomes a supporter when he is satisfied with the offering and refers to friends. 4. Client – A customer who make repeat purchases . Customer – A prospect who get attracted by the offerings and buy the product or service. 6. Prospect – Is a target, a possible customer. Learning about customers 1. Knowledge acquisition 2. Customer differentiation Customization of Marketing Mix 1. Product 2. Price 3. Place 4. Promotion 6 Types of Markets or Marketers * Customer market * Referral market * Influence market * Recruitment market * Supplier market * Internal market Misunderstanding of CRM * Database Marketing. * CRM is a marketing process. * CRM is an IT issue. * Loyality scheme. * Can be implemented by any company.Tools & process of C RM Value chain Primary Stage| Customer Portfolio Analysis| Customer Intimacy| Network development| Value preposition development| Manage customer lifestyle| Customer| | | | | | | | Supporting conditions| Leadership & Culture| | | Data & Information Technology| Profitability| | People| | | Process| | Zero Customer Defections * Price defector * Product defector * Service defector * Market defector * Technology defector * Organizational defector Customer Redemption program to reduce defection Step 1: Measure customer redemptionStep 2: Interview formal customers Step 3: Analyze, compile and service data Step 4: Identify switching barriers CRM Framework Red block – Major role Blue block – Minor role Relationship Style| Initiation| Development| Maintainance / Enhancement| Psychological Step| | | | Stwiching|   |   |   | Satisfaction|   |   |   | Trust|   |   |   | Commitment|   |   |   | Loyality|   |   |   | CRM in B2C Market Characteristics of services A. Intangibility – Could not be felt immediately B. Heterogeneity – differences C. Simultaneity – similar quality products offered at same time D.Perishability – shelf life of consumable products or zero inventory. Dimensions of Quality Services I. Reliability II. Assurance III. Tangibility IV. Empathy V. Responsiveness Cost of losing a customer 1. Reduces cash flow for firm in future. 2. New customers cost up to 5 times more. 3. More cost effective for services firm as they discover new traits of customer likes and dislikes. 4. Developed a higher level of loyalty can change more for their products and services. 5. If word of mouth is good, then firms have to spend less on advertisement and spend for attracting new customers.