CRM 1

Mr.K.
Mohan Kumar
Contents
Introduction.
CRM fundamentals.
How it works?
CRM systems and technology.
Defining CRM objectives.
CRM goals differentiated by departments.
Purpose of CRM
CRM as business strategy.
Measuring the success of CRM.
INTRODUCTION
 CRM is a business philosophy that describes a strategy
placing the client in the center of its processes, its activities
and its culture.
 IT applications are the tools that allow an organization to

implement the CRM strategy. The new IT developments
can help an organization regularly adapt its strategies.
 The main CRM concept is quite simple

 Throughout many years, the companies focused their efforts
primarily on lowering the costs and improving their internal
efficiency. Thus they concentrated more on the internal
processes, often automating back-office functions elements
like manufacturing, logistics and finance.
 In contrast, the management effort invested in client

service, for example selling and marketing, was often
relegated in a last place.
 As the market gets stronger and the providers become more

efficient in offering products or services, it becomes more
difficult to differentiate between rivals.
What is the true difference between two types of
toothpaste?
 In the meantime, as the quality of services and products
improves, client expectations increase.
 As long as the client has the possibility of changing his

provider, it becomes harder to keep him loyal.
 In conclusion, it is highly important for a modern company

to own a system that will shorten the reaction time to
customers' requests and complaints, thus offering support
and quality for its services.
 It has been proven that necessary costs for client maintenance are
significantly lower than those associated with new client
acquisition.
 While businesses will continue to extend the clients database,

they should also concentrate on keeping and multiplying the best
of these clients.
 Increasing a client's action - or in other words the quantity of

business each client generates -becomes as important as
increasing the action of the market. Through a good
administration of the relationship with a good client, the
profitability will certainly grow.
 Essentially, the above represents the concept of Customer

Relationship Management.
CRM FUNDAMENTALS
 The term CRM became popular in the mid-1990s even
though the principles that underline the concept of
relationship management - representing the essence of
marketing - are not new and have been practiced for a long
time, especially by small businesses.
 Since the marketing instruments used by small businesses

(e.g., mostly personal contact between buyer and seller and
therefore a good knowledge of the buyers needs) are not
achievable for larger businesses, CRM technology should
enable managing customer relationships on a larger scale.
“The philosophy of CRM is the recognition that a long-
term relationship with customers can be one of the most
important assets of an organization, providing
competitive advantage and increased profitability.”
According to studies, the average company loses
between 20 and 50 percent of its customers every year,
and also finds it hard to retain its best customers.
Deregulation, diversification and globalization have

stimulated a dramatic rise in competition.
These marketplace realities have forced companies to

switch from a product-centric approach to a customer-
centric approach. According to IDC, the CRM industry
gained momentum in the past years and the CRM
application market increased by 84 percent, to $6.2
billion in 2000.
HOW IT WORKS?
 Customer Relationship Management (CRM) is a complex
system, consisting of procedures, strategies, software and
web applications, that assists a company in organizing and
managing the relationship with its clients .
 CRM facilitates the interaction with clients through the

most efficient, the fastest and the most sophisticated
channel of communication - the Internet.
 It is a solution that concentrates on the people, the
processes and the information from within a company, and
aims to support its clients better and increase the level of
fidelity/loyalty.
 The spectacular growth and the continuous re-evaluation

of the organizations that use websites brought the Internet
to the attention of today's management philosophy.
 The Internet offers another infrastructure through which

the organizations can interact with clients in the same way
they interact through phone, fax or email.
 The complexity of this interaction through multiple
channels indicates some areas in which technology can
reduce personnel effort and investments.
 At this moment, many companies consider that the

advantage of the web is actually the fact that visitors can
find answers on their own, thus minimizing the effort of the
companies, reducing direct contact with the agents and
improving the efficiency.
 Generally, this consists of pages that contain answers to the

most frequently asked questions (FAQs).
 More complex systems analyze the questions and search

the database for possible answers.
 In each case, the system should be updated constantly, as
new problems and new solutions appear.
 The most sophisticated systems will automatically "learn"

from the cases where the problems were solved, adding the
necessary information in their databases.
 Because many users don't trust the web concept, part of the
Internet support systems will offer different ways to
communicate directly with the agents, including online
chatting.
 Most of the web based systems will have this feature, that
will allow clients to be contacted or to contact the agents
directly over the phone, thus respecting the request of
receiving services through the favorite channel of
communication.
 When this facility is activated in an integrated system, the

contact center will have the possibility to identify the client
immediately and to access his interaction history with the
organization.
CRM SYSTEMS AND TECHNOLOGY
 Data sources that are used in CRM systems are customer
service inquiries, customer surveys or sales force input
such as purchase history, shipping history, account data,
demographic data and Web sales data.
 Since a part of this information is obtained through

enterprise resource planning systems, ERP databases must
be integrated with some aspects of the CRM databases.
 Furthermore, CRM technology includes different aspects of
information management, including integration with other
enterprise-related systems and methods that convert data to
usable information.
 CRM uses technology, strategic planning and personal

marketing techniques to build a relationship that increases
profit margins and productivity.
 It uses a business strategy that puts the customer at the core

of a company's processes and practices.
 The implementation of CRM software should come along
with a change of the company's mindset to become more
customer oriented.
 It requires this customer focused business philosophy to

support effective sales, marketing, and customer service
and order fulfillment.
Some examples of CRM initiatives are:
 A database that specifically tracks customer service issues.
 A web page that allows customers to check inventory

availability, order status, and place orders.
 Data warehousing to build an information database to

better understand your customers.
 Capturing visitor data including their name, e-mail,

location, and purchasing preferences.
DEFINING CRM OBJECTIVES
The business objectives for the implementation of CRM
software are:
 Increased customer number and customer profitability.
 Increase in market share
 Increased campaign response.

 Higher customer satisfaction ratings.
 Greater number of returning customers on the Web site.
 Simplified internal organization (shrink workflow, shortens

cycle times, and eliminates non-productive information
flow).
Furthermore, The Conference Board surveyed 96 global firms
in order to analyze the CRM programs. 52 percent of the
interviewed companies have implemented a CRM solution
and, among others, the top three strategic motives were :
 to increase customer retention and loyalty,
 to respond effectively to competitive pressure and to

achieve a competitive advantage,
 to differentiate competitively based on customer service

superiority .
CRM GOALS DIFFERENTIATED
BY DEPARTMENTS
 Customer Support - Customer service objectives
are:
 obtain basic information about customers and their

complaints,
 customer satisfaction monitoring and faster complaints

resolution in order to raise customer retention rates,
 to increase self-service efficiencies, and
 to mitigate the need for in-person assistance.

 Sales - The sales department objectives are :
 to deploy sales force automation across regions,
 to track contact history, to streamline the sales process,

and to qualify prospects based on past experience.
 Field Service - Field service implies the service or

repair of the customer's equipment on the customer's
premises. Field service engineers need to monitor
customer complaints and repairs histories.

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Mr.K.

 IT applications are the tools that allow an organization to

 The main CRM concept is quite simple

 In contrast, the management effort invested in client

 As the market gets stronger and the providers become more

 As long as the client has the possibility of changing his

 In conclusion, it is highly important for a modern company

 While businesses will continue to extend the clients database,

 Increasing a client's action - or in other words the quantity of

 Essentially, the above represents the concept of Customer

 Since the marketing instruments used by small businesses

Deregulation, diversification and globalization have

These marketplace realities have forced companies to

 CRM facilitates the interaction with clients through the

 The spectacular growth and the continuous re-evaluation

 The Internet offers another infrastructure through which

 At this moment, many companies consider that the

 Generally, this consists of pages that contain answers to the

 More complex systems analyze the questions and search

 The most sophisticated systems will automatically "learn"

 When this facility is activated in an integrated system, the

 Since a part of this information is obtained through

 CRM uses technology, strategic planning and personal

 It uses a business strategy that puts the customer at the core

 It requires this customer focused business philosophy to

 A database that specifically tracks customer service issues.

 A web page that allows customers to check inventory

 Data warehousing to build an information database to

 Capturing visitor data including their name, e-mail,

 Increased customer number and customer profitability.

 Increase in market share

 Increased campaign response.

 Greater number of returning customers on the Web site.

 Simplified internal organization (shrink workflow, shortens

 to increase customer retention and loyalty,

 to respond effectively to competitive pressure and to

 to differentiate competitively based on customer service

 obtain basic information about customers and their

 customer satisfaction monitoring and faster complaints

 to increase self-service efficiencies, and

 to mitigate the need for in-person assistance.

 to deploy sales force automation across regions,

 to track contact history, to streamline the sales process,

 Field Service - Field service implies the service or

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