BA 7015 CUSTOMER RELATIONSHIP MANAGEMENT

UNIT III CRM STRUCTURES

Elements of CRM – CRM Process – Strategies for Customer acquisition – Retention and
Prevention of defection – Models of CRM – CRM road map for business applications.

Table of contents

3.1 CRM structure ................................................................................................................................... 2

3.2 The Key Elements of Customer Relationship Management ............................................................. 2
3.2.1. Essentials Elements of CRM .......................................................................................................... 8
3.3 CRM Process.................................................................................................................................... 17
3.3.1 Theoretical foundation of the CRM process ................................................................................ 17
3.4.1. Definition (2 mark) ...................................................................................................................... 19
3.4.2. Customer Acquisition Strategies and Tactics .............................................................................. 19
3.4.3. Developing a Customer Acquisition Strategy ............................................................................. 20
3.4.4. Steps to Build a Customer Acquisition Strategy ......................................................................... 22
3.4.5.Customer Acquisition Challenges ................................................................................................ 23
3.5. Retention of a Customer with Practical Examples (16 mark) ........................................................ 24
3.6. Retention and Prevention of Defection (16 mark) ........................................................................ 32
3.7. Models of CRM............................................................................................................................... 39
3.8. CRM Road Map .............................................................................................................................. 45

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 1
3.1 CRM structure
What is CRM structure? (2 mark)

CRM, or Customer Relationship Management, is a company-wide business strategy designed

to reduce costs and increase profitability by solidifying customer satisfaction, loyalty, and
advocacy. True CRM brings together information from all data sources within an
organization (and where appropriate, from outside the organization) to give one, holistic view
of each customer in real time. This allows customer facing employees in such areas as sales,
customer support, and marketing to make quick yet informed decisions on everything from
cross-selling and up selling opportunities to target marketing strategies to competitive
positioning tactics.

3.2 The Key Elements of Customer Relationship Management

1. Make It Sticky

"stickiness" is a measure of how users perceive your site. According to Media Metrix, a Web
viewer behavior-measurement company, a sticky Web site has contents that draw people
back to it frequently.

Determining the sticky quotient of your Web site requires server log analysis. These stats can
tell you how long each visitor stayed at your site, how often they return and what drew their
attention.

But simply having the server numbers won't do you much good unless you put the knowledge
to use and design your Web site accordingly. For example, if most of your visitors spend the
bulk of their time viewing specific information, then you should provide more of that type of
information.

2. Make It Easy

Jakob Nielsen of the Nielsen Norman Group is one of the Web's leading proponents of the
importance of "usability." Nielsen believes that too many companies make it too difficult for
people to find information on their Web sites.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 2
A Web site should be structured in such a manner that visitors can find what they need and do
what they want easily, insists Nielsen. For example, you may know that your company's
consumer electronics division in Chicago handles repairs of laptop hard driv es, but no one
outside of your company is likely to know that. So don't structure the information in a way
that only makes sense to insiders.

Don't disregard the importance of a clean interface. Industry insiders believe that Levi strauss
& Co. failed at e-commerce because the site did not provide a good customer experience.
Creative Good's Hurst says that levi.com was plagued with slow-loading pages that hindered
the customer's desire to shop for Levi strauss products.

"Customers shop online for convenience," Hurst says, "yet levi.com slows customers down
by displaying irrelevant pictures of its pouting models. Customers can't find the jeans, so they
can't buy the jeans. No wonder levi.com proved to be a bad return on the company's
investment."

Hurst sums it up: "If the customer experience was better on levi.com, more customers would
buy, and revenue would be so high that Levi's would never have pulled the plug. Levi's
withdrawal shows how the customer experience is the key driver of success or failure in e-
commerce."

3. Make It Private

A recent study by the N.J.-based think tank Privacy & American Business and
PricewaterhouseCoopers showed that 96 percent of Net users surveyed believe it's very
important for Web sites to post privacy polices that detail what type of information is being
collected and how it will be used.

The Federal Trade Commission (FTC) is debating the advisability of enacting government
regulation to protect Web privacy at all consumer-oriented commercial sites. The proposed
legislative model is built around four core concepts. The first is to give consumers notice of
what information is collected and how it is used. The second is to let consumers choose
whether to allow secondary uses of information (for example, to decide whether their name
can be used for follow-up marketing from the company or be sold to a third party). The third

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 3
is to give consumers "reasonable access" to their information and let them correct any errors.
The fourth is to ensure the information's security.

Even without new laws on the books, the FTC has made it clear that it will go after
companies that mislead consumers. The commission recently claimed that GeoCities, a Santa
Monica, Calif.-based company that runs a 2 million-plus member community Web site,
misrepresented why it was collecting personal identifiable information from its members.
GeoCities disagreed with the FTC, saying that it believed it made it clear how members'
registration information could be used. To settle the case, however, the company agreed to
stringent new privacy practices that included the following: barring collection and use of
personal information about GeoCities' members by third parties; inserting its privacy notice
in more places on its Web site and emphasizing the notice on members' application forms;
requiring children to get parental consent when they apply for a membership; and
strengthening community leader training. For help in designing your own privacy policy look
at the Direct Marketing Association's Web site (www.the-dma.org) and TRUste
(www.truste.com). Both list guidelines for developing an online privacy policy. At the
DMA's site you can fill out a questionnaire about your company's privacy practices and the
site will create an online privacy notification statement to post on your company's home page.
TRUste also has a "privacy policy wizard."

4. Make It Fast

Web surfers are looking for material that gets to the point quickly. The easiest way to
communicate over the Web is with short bits of text along with illustrations, graphs and/or
diagrams. But do make sure all of those graphics load quickly.

Keep the important points on top of the page and provide navigation options on both the
bottom and top of each page. Provide a site map accessible via an easily found link to let
users know where they are and where they can go. A search feature is a good idea, but make
sure it is configured to accept general search terms, not for example, just the specific product
names and/or numbers used by your company. If you're going to use a search function, run
some searches with it first and make sure it can find your content.

The point is to turn prospects into customers and customers into loyal clients by giving them
the information they need in an easily navigated format. The underlying structure of your
| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 4
Web site should be designed to gently lead people where you want them to go. That doesn't
mean it should be set up like a grocery store, where people have to pass by the impulse items
in order to get to the bread and milk. But do spend some time considering what you want to
get from the site, and what you can give people in order to achieve your goals.

Are you pushing a product? Then you want to make it easy for people to find information
about your goods or services, and convince them that it is a good thing. You might want to
lure people to your site with information, a great link list or some sort of freebie. Of course,
you don't let them go right to the "giveaway" stuff--first you make them take a look at what
you have to offer. But keep the sales pitch brief and as unobtrusive as possible. If your
product is worthwhile, they'll be back.

Or perhaps you're providing technical-support for your products--here you want to ensure
that aggravated customers can find what they need as quickly and easily as possible. And
note that all Web sites built to support product-driven enterprises should offer self-help
aftermarket support to keep clients happy, cut down on basic service calls, and garner
information usable for product revisions and marketing use.

5. Make It Personal

One third of all the people who buy online shop at Amazon.com. Obviously this is the place
to visit for a crash course in how to build a Web site right. Amazon.com CEO Jeff Bezos says
that while customer service is the most important thing in any business, it's more important
online than in the physical world. "The reason is, customers have more power online."

Bezos believes that Amazon.com succeeds through providing real value for each specific
customer through selection-targeted information based on past purchases and the products
purchase history, including interactive features that allow customers to help other customers
make purchase decisions.

Amazon.com's use of personalization features is the best in the e-commerce business. For
example, one-click shopping allows repeat customers to purchase products with a single click
of a single button. And after you've ordered once or twice, Amazon.com also recommends
products using a technology the company calls collaborative filtering--suggesting other
products that a customer might be interested in based on past purchases.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 5
Amazon.com customers are confident that the information Amazon.com tracks on individual
purchases is being used to enhance their experience. But if it's not done right, attempts to
personalize pages can backfire. OfficeMax.com's site has a button that invites "first-time
users to click here." When they do, they are taken to a page describing the site's frequent-
flyer program, personalization features and other information irrelevant to customers who just
arrived at the site and are interested in looking at what's being offered.

Compounding the problem, OfficeMax.com asks new customers to "Register Now," pushing
people to sign up before they know if the site will be useful to them. The idea is to gently
woo your customers before you propose marriage to them.

6. Make It Work

Charles Schwab's (www.schwab.com) Internet Trading Customer Center serves 2.2 million
investors who use the system to research, execute and manage their securities investments.
Initially, the system had limited functionality--customers could check balances, buy and sell
equities and get real-time stock quotes. The company phased in services, ensuring that each
feature worked before launching another. In fact, they didn't advertise the product when it
was launched, choosing to work out the bugs with a limited audience rather than to invite the
world over on opening day. Yet, in its first month, the system--by word-of-mouth--attracted
100,000 customers.

Schwab's center is not totally trouble free; it has had a few notorious outages. But regular
clients look at the site's track record and know that everything that can be done to keep the
center up and running has been done. Careful site management engenders trust.

7. Make It Strong

Supporting systems need to work as well as their Web-based front ends. In a survey of online
commerce sites, Jupiter Communications found that call centers and fulfillment services are
the most vulnerable components of the Internet selling chain. Despite this, only 54 percent of
companies interviewed said they had tested fulfillment systems and only 44 percent said they
had tested call center performance.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 6
The study asked merchants to evaluate the effect twice the amount of normal traffic would
have on Web response rates, levels of service and shipping services. Only 10 percent of sites
surveyed said they would be capable of dealing with the surge overnight. Thirty-three percent
said that their fulfillment services would not be able to cope with the increase in demand and
29 percent said their call centers were not up to scratch.

Company officials were more optimistic about Web site and server capacity. Eighty-five
percent said they had tested their sites and only 15 percent felt their site would not hold up.
Jupiter opined that while Web sites are easy to test and prepare for increased traffic,
fulfillment services and call centers are not. Both are crucial components of the sell, and
therefore demand strategic thinking and investment to ensure scalability.

8. Make It Professional

Jupiter Communications also reports that despite the critical need for more substantial
customer support, the number of e-mail queries being answered is decreasing.

The Jupiter survey sent customer inquiries to the top 125 Web sites in the retail, travel,
content, financial services and consumer brand sectors, and found that customer service
failure rates are higher than last year. Only half of the shopping sites and 40 percent of the
travel sites responded within a day. Shopping sites demonstrated a 40 percent failure to
respond rate, up from 28 percent last year, while travel sites had a 48 percent failure rate (up
from 38 percent).

Forty-six percent of all Web sites tested failed to respond within five days--if at all--or did
not have contact details on their site for customer queries. In the same survey last year, this
figure was 38 percent.

The study's results suggest that online marketers may need to start implementing multi-
channel-automated strategies to retain existing customers and attract new ones. It is important
to make sure that services are in place to handle higher than anticipated usage. Unanswered e-
mails (and in Internet time "unanswered" translates to within 24 hours) reflects badly on your
company.

9. Make It Win-Win

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 7
 The ability to seek out and act upon the demands of the market is what makes one e-business
different from another. Call it customer relationship management, value adding or just plain
common sense, the ability to act fast on data gathered is what differentiates an e-business
from a corporation that simply has a Web site.

But people don't want to feel that your site is simply slurping down information solely for its
own purposes. As an example of the right way to do it, visit Outpost.com, a computer
hardware and software retailer. Outpost.com has a sales push embedded in its checkout
process that obviously helps itself but also helps customers--it simply points you to other
products that would make good counterparts to your purchase. If you're buying a printer, for
example, Outpost.com shows you a selection of supplies that go with the equipment. The
process is so well designed that customers feel grateful for being given the opportunity to add
more items to their shopping cart, and it's much more effective than a post-sales follow-up
letter.

10. Make It Interactive

Lands' End (www.landsend.com) gets high marks from shoppers for its clean, easy-to-
navigate interface. The site recently added two interactive features that have had even more
of an impact.

Lands' End Live lets customers enter their phone numbers on the Web site, and in return
customers get an amazingly speedy call back from a customer service rep. Shop with a Friend
allows two people in remote locations to get online, page through the site together, use text-
based chat and drop purchases into the same basket.

The Internet is an interactive medium and Web sites that take advantage of the technology
win high marks from consumers. As Amazon.com's Jeff Bezos says, "if you can do
everything that you're doing offline, then why are you doing it on the Internet?"

3.2.1. Essentials Elements of CRM

The Eight CRM Essentials

1. Rapid time to value

2. Point-and-click customization

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 8
3. A 360-degree customer view

4. Real-time visibility

5. No more dirty data

6. High adoption

7. Extending your success

8. A broad community

1. Rapid Time to Value

Instant messaging, 24/7 customer service, shorter development cycles… today, businesses
and their customers move at a rapid clip. Buy decisions are made quickly, and in fact entire
businesses can succeed or fail in a matter of weeks. That means that the no one has the luxury
of waiting months or even years to install a traditional, expensive, client/server CRM
application. The competitive advantage today is on-demand CRM. On-demand CRM
solutions are better suited to today‘s fast-moving businesses. You can be up-and-running with
on-demand CRM in a matter of weeks, so you can focus on delivering greater value to
customers, rather than worrying about installing and maintaining hardware and software.
Unfortunately, many companies do exactly that—spend too much time managing IT
infrastructure and not enough time on the business. According to Gartner, "Eight out of 10
dollars you spend in IT is dead because, while it is keeping the lights on, it isn‘t directly
contributing to your business growth or to enhancing your competitive advantage." ["The
2006 Gartner Symposium Keynote: IT Must Think Differently, Act Differently and Be
Different to Drive Business Growth," by Mark Raskino, et. al., October 19, 2006.] With no
software to install or upgrade and no hardware to house and manage, on-demand CRM frees
IT to be more innovative, responsive, and strategic for your organization. By leveraging an
agile, on-demand platform, you begin seeing the benefits of CRM immediately.

 Concentrate on your business initiatives. There‘s no hardware or software to buy or

install.
 Let your users get started right away. Born-on-the-Web CRM solutions are as easy to
use as the consumer Web—anyone familiar with Amazon.com or My Yahoo! will be
comfortable with the Web interface of on-demand CRM.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 9
  Accommodate global requirements quickly. You can manage multiple languages and
currencies as easily as English and U.S. dollars.
 Get a custom solution for your specific needs quickly. With a few clicks of the mouse,
you can make departmental, regional, or global changes; add custom data fields, new
users, and workflow rules; and even create new applications.

With the on-demand model, customer-facing employees—and strapped IT teams—no longer

have to get embroiled in complicated, time-consuming, high maintenance technology
projects. Not only does on-demand.CRM deliver numerous business benefits, it does so
quickly and with minimal distractions and hassles for your busy teams, so they can focus on
your business, not on technology.

2. Point-and-Click Customization

No CRM solution is going to fit like a glove right out of the box, because the reality is that no
two companies‘ customer relationships and processes are exactly alike. However, because
many traditional CRM solutions are difficult and expensive to customize, some organizations
are forced to alter their business processes to fit the capabilities of their CRM technology.
The key to success is a highly flexible CRM solution that allows you to keep pace with
changing customer needs and your evolving business environment.

On-demand CRM is uniquely suited to adapt to changing needs in real time. No matter what
type of business you‘re in, how big or small your company is, or how unique your customer
relationships are, your organization will benefit from the flexibility that the on-demand model
provides.

 Configure any field, workflow rule, page layout, or report with a few clicks.
Implement changes for specific users and teams, and take control of the entire
customer lifecycle—marketing campaigns, leads, opportunities, customer service and
support, etc.
 Create custom applications for your unique processes or add other best-of-breed on-
demand applications—without programming.
 Roll out CRM in additional languages and currencies instantly for your colleagues in
other geographies.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 10
The ease with which we can point and click our way to customizing consumer Web pages has
dramatically raised everyone‘s expectations for implementing changes even in business
applications. Only the on-demand model can accommodate quick customizations on an
ongoing basis, making the weeks or months it takes to make even simple changes to
traditional software seem hopelessly old-fashioned.

3. A 360-Degree Customer View

The quality of the customer experience makes and breaks companies. Customers are
becoming increasingly demanding and sophisticated, and they‘ll take their business
elsewhere if you don‘t deliver the superior service they feel they deserve. Companies today
are challenged to integrate and manage the complete customer lifecycle—seamlessly and
effectively—to win and retain those highly desirable most-profitable customers. For many
companies, the underlying, proven formula for success involves using on-demand CRM
across all those critical customer touch points. Too often, sales, operations, marketing,
customer service, help desk support, professional services, and other customer-facing
organizations use disparate systems, so no one has a complete picture of the customer. With a
multitenant, on-demand CRM solution, customer information and activities are easily unified
and shared so that every department has a 360-degree view of the customer and can provide
quicker, better service.

1. Leads go directly to the right sales team or individual rep, are well qualified, and include
the right information.

2. Marketing gets real-time visibility into the status of every lead, sees which lead sources
drive the most revenue, and plans appropriate customer marketing campaigns.

3. Service and support organizations get visibility into which products or services the
customer is using and any pending sales opportunities, and can alert the sales team to
potential cross-sell and up-sell opportunities.

4. Back in sales, reps get insight into any outstanding customer service issues so that there are
no unpleasant surprises when they make their sales calls.

4. Real-Time Visibility

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 11
To stay competitive, businesses must ―mind their metrics.‖ Constantly monitoring the health
of the business, determining what‘s working and what‘s not, and making adjustments to
improve operations and increase revenue are essential to surviving and thriving in today‘s
competitive market. As easy as it sounds, every executive knows that too often, it‘s difficult
or impossible to get the timely analysis you need to effectively run the business.

 Sales executives get better insight into customer information and sales activities and
finally have instant access to accurate pipeline information and forecasts. And with
the ability to add partner relationship management, channel sales can be managed
right alongside inside sales, for an integrated view of all your sales activities.
 Marketing executives can measure and manage the effectiveness of their campaigns
and tie revenue back to individual marketing activities. Finally, marketing ROI is
measurable.
 Customer service and support executives have access to up-to-the minute information
about global service operations—such as agent performance and service quality—so
that they can make the right adjustments and implement changes that will have a
positive impact, quickly.

For example, a new company with a promising but unknown product will need to invest
heavily in marketing campaigns to solicit customers, build product awareness, and establish
its brand. The company would want to keep close track of metrics such as new leads per
marketing campaign, sales opportunities per campaign, and opportunities closed per
campaign. On the other hand, a company with a well-established brand, a large customer
base, and a mature portfolio of products would want to focus on metrics that help identify its
most profitable customers and show which programs further increase their customers‘
spending and ensure their loyalty. This company would want to track up-sells and cross-sells
with metrics such as the number of products or services per customer and average profit per
customer.

5. No More Dirty Data

Almost every company suffers from ―dirty data‖ syndrome, and few have any idea what to do
about it. Consider the findings of the IBM Global Data Management Survey of 600 major
enterprises: 75 percent of the respondents reported significant problems as a result of
defective data, including violated contract terms, failure to bill or collect for services or

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 12
products delivered, delays in or abandonment of new systems projects and extra accounting
costs. You can‘t be successful with CRM until you find a remedy to the data integrity
problem that is prevalent in organizations of all sizes and in every industry. A three-step
approach to quality data management can address this issue so that your CRM initiative will
be free of dirty data.

1. Capture. If you don‘t capture it, you can‘t measure it. In order to capture all the data you
need to get an accurate analysis of your business, you need everyone in the company to use
your CRM system rather than store data in un integrated or offline sources such as
spreadsheets. To get quality data, high system adoption is critical. You can also capture
customer information (such as leads) from your Web site to populate your CRM system.

2. Clean. Once you have the data in your CRM system, you need to continually weed out bad
data by removing duplicates, synchronizing changing data, and updating information. You
should have the flexibility to leverage data cleansing applications that tie in with your CRM.

3. Augment. Merely cleansing your data is not enough. Maintaining high data quality also
means filling in the blanks. For example, some of your account records may be missing
company information such as revenue, number of employees, key executives, and so on. You
can augment your data by leveraging data service providers to help you fill in the gaps.
Providing your teams with full details on their customers or potential customers in one spot
makes them more effective at in-depth analysis and prospecting.

6. High Adoption

There‘s nothing worse than investing in CRM and having no one show up. Too many CRM
projects fail due to poor user adoption. After all, technology is only as good as the people
who use it. To ensure that people do use your CRM system, it must be easy to use, accessible,
and scalable, and significantly enhance productivity, efficiency, and visibility. On-demand
CRM solutions that are delivered via a Web browser encourage adoption by replicating the
familiar point-and-click interfaces of popular consumer Web sites, where everything must be
user friendly.

A look at successful CRM initiatives uncovers several best practices for driving user
adoption.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 13
  Build support for CRM early on. You should communicate your CRM strategy and
timeline to key stakeholders well in advance of the implementation to set
expectations.
 Go top down, bottom up, and sideways. After securing an executive sponsor, have
him or her send a communication to the company to reinforce the importance of the
initiative and encourage participation. You should also cultivate active and vocal
advocates/end users to drum up support among the troops and identify team project
members from all affected areas of the organization.
 Focus on people and processes. You need to recruit people who know the day-to-day
activities of your user community, work with them to thoroughly document business
processes, and customize the CRM application to reflect those processes.
 Make your users‘ lives easier. It must be easy for users to sync information with their
other productivity tools, like Microsoft Outlook. Integrating with related systems
provides a one-stop-shop for all the information users need. And you can delight users
by providing unexpected information of value, right when and where they need it. For
example, when a user enters competitive information about a deal into the CRM
application, point him/her to the location of materials on how to sell against that
competitor.
 Let them take it on the road. For mobile employees such as field sales reps, nothing
boosts productivity and user satisfaction more than providing CRM access from the
field.
 Keep it simple. Provide users with information relevant to their everyday tasks. Don‘t
overburden them with excess information that will distract them and impact
productivity. Customize the views that each team and user type sees, so that an
individual user sees only the information relevant to his/her role or project.
 Train you users in advance. You should develop online and custom training to
reinforce your unique processes, roles, and terminology. Even the easiest-to-use CRM
system benefits from custom training to show users how the system relates to your
company.
 Give executives and everyone a bird‘s-eye view. Give every executive a dashboard
that provides instant visibility into all the metrics he/she cares about. Empower every
user to create his/her own reports without having to wait for the system administrator
or IT team.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 14
  Reinforce adoption with carrots and sticks. Build CRM usage with incentive programs
such as spiffs, contests, etc. (―carrots‖). And for those who are more motivated by
fear, reinforce the importance of using CRM with ―sticks,‖ such as executive
communications and programs that tie usage to highly desirable results, the most
popular of which is to only pay commissions on opportunities that were created in the
application. Validate adoption using reports, dashboards, and spot checks.
 Give everyone a voice. Encouraging feedback creates a sense of collective ownership
and investment in the system. By encouraging feedback and responding to it by
customizing the application to incorporate good suggestions is an excellent way to
build adoption.

7. Extending Your Success

Business is about evolution. Smart and successful companies are flexible enough to adapt as
necessary while never letting go of the core mission and values. If your business must be
nimble to survive, why should you commit to a rigid, inflexible technology solution for
something as important and core to your business as CRM? The ability to tie-in additional
best-of-breed applications that address other key business initiatives and processes is
essential to the long-term success of your CRM solution. On-demand CRM embraces the
latest Web services technologies so that companies can take the on-demand model beyond
CRM by plugging in other Web solutions or even building custom on-demand applications
easily and quickly.

With Sales force CRM, for example, customers can find, test drive, and quickly install
additional applications from the App Exchange. This unique marketplace offers hundreds of
pre-integrated applications from salesforce.com, developers, and partners that supplement the
core Sales force CRM functionality or automate entirely different business processes, such as
human resources, finance, administration, and operations. These applications have all the
benefits of on-demand CRM: no infrastructure or hardware requirements, easy customization,
real-time insight, and more.

CRM is not an island. Because it touches so many aspects of your business, you want to
make sure that your CRM system can flexibly accommodate related processes and
applications. Like many other companies, you may find that once you get started with on-

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 15
demand and begin realizing the many benefits of the model, you will want to find other
processes and applications to bring onto your on-demand platform.

8. A Broad Community

Community-building Web technologies and sites are some of the most popular and fastest-
growing areas on the Internet today. Through blogs, wikis, social and business networking
sites, and much more—people are increasingly engaging with each other online. At the same
time, companies are realizing that nurturing their customer communities and engaging with
customers can yield dramatic results in terms of customer loyalty and brand awareness. At
the cross section of these two trends is on-demand CRM: the perfect enabler of community
growth.

On-demand CRM solutions can help build and manage interactive, online communities. The
interaction and feedback that are generated in the online forum can flow back into the CRM
system for analyses that can guide decisions on improving the overall customer experience.
You can facilitate the growth of a strong customer community by providing online forums for
a variety of topics of interest to your customers, including:

Best practices. Encourage customers to share tips, tricks, success stories, and ideas, etc.

 Ideas and voting. You and your customers can share ideas on the future of your
products and services.
 Providing the opportunity for customers to vote on ideas is an excellent way to get
feedback, drum up participation, and help customers feel invested in your company‘s
future.
 User groups. You can set up local user groups and provide an online forum for
communication and planning among the local members.
 The power of the community is growing every day. Using an on-demand solution to
help you build stronger relations with your various stakeholders is an easy way to
harness that power to benefit your business.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 16
3.3 CRM Process

4 Key Steps in the CRM Implementation Process (2 mark)

1. Identify all areas of your business that touch the Customer or the Prospect.
2. Identify all of the business processes that manage the touch points with the Customer or
Prospect.
3. Select the appropriate CRM and Sales Force Automation (SFA) system that will allow the
business processes impacting the Customer or Prospect to be managed in the most efficient
and effective manner.
4. Document those business processes and train the users on the utilization of the CRM
system with a focus on how that system will deliver value to their daily work lives and how it
will maximize their efficiency and effectiveness in managing their relationships with their
Customers and Prospects.

3.3.1 Theoretical foundation of the CRM process

A challenge of defining CRM is that any definition is contingent on the level at which
CRM is practiced in an organization or, for that matter, what the researcher or man- ager
believes about the correct level of CRM. There are three different possible levels: (1)
functional, (2) customer- facing, and (3) companywide.
This perspective includes the building of a single view of the customer across all contact
channels and the distribution of customer intelligence to all customer-facing functions. This

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 17
 view stresses the importance of coordinating information across time and contact channels to
manage the entire customer relationship systematically. For example, a bank customer who
has both a loan product and a savings product might interact with the bank through various
channels and different types of inter- actions (e.g., transaction, information request,
complaint), which may change over time. A CRM process on the customer-facing level
would capture these interactions and, on the basis of the generated intelligence, would result
in coordinated and well-defined actions through different functions.
A key question is, How should the CRM process be conceptualized at the customer-facing
level? The literature suggests that companies should recognize four distinct factors: (1)
Building and managing ongoing customer relationships delivers the essence of the marketing
concept (2) relationships evolve with distinct phases(3) firms interact with customers and
manage relationships at each stage and (4) the distribution of relationship value to the firm is
not homogeneous.
A key theoretical basis for CRM research is the relation- ship marketing literature. First, in
this area it is theoretically held that the building and managing of ongoing customer
relationships delivers the essence of the marketing concept. The new institutional economics
approach uses economic theory to explain the development and breakdown of customer–firm
relation- ships. For example, transaction cost theory focuses on minimizing the cost of
structuring and managing relationships and maximizing the returns from them. Common to
all theoretical approaches in the relationship marketing literature is that managing
relationships is beneficial for the firm.
Thus, it is probably not true that more relationship building is always better; rather,
building the ―right‖ type of relationship (which depends on situational factors) is critical. In
other words, facilitators such as organizational design, adequate incentive schemes, and
information technology resources, as well as industry, company, or customer structures, may
affect the performance of relationship marketing activities.
The second aspect of our conceptualization is that the CRM process should acknowledge
that relationships evolve with distinct phases. Thus, relationships cannot be viewed as
multiple independent transactions; rather, the interdependency of the transactions creates its
own dynamic over time. In other words, CRM processes are longitudinal phenomena. The
process of relationship evolution can be subject to termination at any point through customer
causes (ceasing of category consumption), competitive causes, or internally unintended
(attrition through service problems) or internally intended (customer firing) causes.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 18
 The third aspect is that the recognition of relationship evolution has implications for the
organization: Firms should interact with customers and manage relationships differently at
each stage
.For example, Jap and Ganesan researchers find that the effect of transaction-specific
investments on relationship commitment in manufacturer–retailer relationships is positive in
the exploration and the decline phases. A goal of CRM is to manage the various stages of
the relationship systematically and proactively. For example, companies systematically
attempt to mature relationships by cross- selling and up-selling products with high purchase
likelihood.
The fourth aspect is the recognition that the distribution of relationship value to the firm
is not homogeneous. This is a consequence of the increasing adoption of recent accounting
practices, especially activity-based costing. The key advantage of activity-based costing is
that firms are able to make profitability statements along customer relationship lines, not
only along product lines. This enables firms to investigate resource allocations that are made
against the customer relationship profitability distribution. A common finding is that best
customers do not receive their fair share of attention and that some companies overspend on
marginal customers. In a CRM paradigm, a key goal is to define different resource
allocations for different tiers of customers, where the customer‘s tier membership depends
on the economic value of that customer or segment to the firm.

3.4 Customer acquisition strategy

3.4.1. Definition (2 mark)

A customer acquisition strategy defines the best mix of media and engagement tools (lead
generation and product offers to gain new customers through targeting them and reaching
them through online and offline customer journeys.

3.4.2. Customer Acquisition Strategies and Tactics

Managing customer acquisition consists of a variety of interrelated tasks and activities.

Among the more important are pricing programs, advertising, alternative and direct
marketing systems, sales promotions, and personal selling methods. Based on the solid

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 19
foundation of developing a customer-oriented company, customer acquisition creates the
lifeline of sales and return visits vital to a company‘s long-term success.

The product life cycle model remains an important tool for understanding how to acquire
customers. The introduction, growth, maturity, and decline stages of the cycle necessitate
careful responses and strategies from the marketing team.

Customer acquisition provides a key response to the challenges of competition, especially in

the maturity stage of the product life cycle. At every point, companies face the demands of
keeping current customers balanced with using tactics to find new customers. In general,
three basic forms of customer acquisition are

1. Developing existing or new markets,

2. Developing existing or new products, and

3. Branding programs.

4. Identifying Markets

3.4.3. Developing a Customer Acquisition Strategy

The ACTMAN Model

The ACTMAN: Acquisition Tactical Management 6 elements:

1. Targeting
2. Awareness generation and product positioning
3. Acquisition pricing
4. Trial
5. Usage experience and satisfaction
6. Post-introductory pricing and the creation of long-term value for the product or
service

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 20
Targeting

1st degree - Individual Customer Targeting (profiling)

2nd degree – Segment Targeting

3rd degree – Self-Selection Targeting

Awareness Generation

Direct MARCOM  1st degree

Mass communication  2nd & 3rd degree

Positioning is the act of designing the company‘s offering and image so that they occupy a
meaningful and distinct competitive position in the target customers‘ minds

Acquisition Pricing

 Introductory prices should decline as a segments max retention potential goes up

 Introductory prices should be higher for price sensitive groups over time
 Special category of CA is reacquisition of lapsed or lost customers
 Firms can set ―winback‖ prices that are below offered to other acquisition
targets

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 21
Trial

• If product expectations are very high as a result of initial selling communications, and
if the product fails to meet these expectations, the customer probably will not repeat-
purchase, and the lifetime value of that customer will likely be low or even negative

Usage experience and satisfaction

- Product design and the provision of specified benefits

- Post-purchase servicing of the customer

Customer Acquisition Metrics

 No of customers acquired, track & match to co‘s acquisition goals

 Acquisition rate – acquired customers to targeted prospects
 Cost of acquiring a customer etc

3.4.4. Steps to Build a Customer Acquisition Strategy

1. Offer email receipts to every shopper. Many brands still aren‘t leveraging the e-
receipt‘s possibilities, from adding a shopper to your email database to making a note
of which store is a shopper‘s favorite (and tailoring special offers to that store).

2. Can you ask for personal data at check-out? If so, use this data to personalize
communications and begin your welcome communications right away—not just to
make the transaction process lengthier.

3. Which products are similar to a shopper‘s purchase? Which items are frequently
found in carts alongside a certain item? Add product recommendations to e-receipts
and physical receipts to encourage each shopper to reengage.

4. Online. Be respectful of customers‘ time, and recognize that customers want different
things from different channels. Use each channel‘s strengths and maintain a common
view of each customer.

5. Always optimize acquisition forms for mobile. If a customer is on a tablet or smart

phone and can‘t fill out your form quickly and easily, you‘re sure to lose the opt-in.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 22
 6. Customers are increasingly researching products via mobile device while in stores (in
retail circles, the practice is called show rooming), so be sure that individual product
pages are mobile-optimized, as well as your email design.

7. Make your preference center easy to find and navigate. Give people the option to
explicitly tell you about their interests, and use that data to provide personalized
content and product recommendations.

8. Give customers a chance to voice their opinions through a one- click

recommendations feature. Do they own, love, or hate a recommended product? This
explicit, customer-given feedback is then added to their individual profile to help
power future recommendations and email triggers.

3.4.5.Customer Acquisition Challenges

Target Prospects

Identify prospective customers matching your business objectives using specialized research,
market surveys, psychographic profiles and analytics tools to segment audiences. By creating
more targeted and relevant messaging for your offers, you'll improve your customer
acquisition ability.

Evaluate Risk
Determine which businesses and consumers make profitable new customers and present the
least amount of risk. Experian offers business reports, public records and risk modeling tools
as well as credit information, application screening tools and scoring software to assess a
prospect‘s creditworthiness.

Determine the best offer

Set optimal lending terms using scoring and segmentation tools. Our customer acquisition
programs analyze credit application data and automate the decisioning process to provide you
with the most profitable offer recommendations.

Originate credit Applications

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 23
Minimize risk while simplifying the credit application process. Experian‘s credit and loan
origination software products analyze risk and automate underwriting to improve the integrity
of your lending efforts.

Improve Direct Mailings

Achieve better results from your direct mail offers by having valid data, correct addresses to
improve delivery and suppression techniques to exclude customers you aren‘t targeting.
These simple measures significantly decrease costs associated with returned mail or non-
conversion.

Market Research

Gain a better understanding of consumer behavior, attitudes and motivations, and get an
accurate picture of your prospects using our extensive business reports and customized
modeling tools.

Digital Marketing

Acquire new customers using online marketing and targeted television advertisements.
Electronic media is a more cost-effective way to advertise your products and services and it
provides immediate and quantifiable results.

3.5. Retention of a Customer with Practical Examples (16 mark)

What is Customer retention? (2 mark)

Customer retention is the activity that a selling organization undertakes in order to

reduce customer defections. Successful customer retention starts with the first contact an
organization has with a customer and continues throughout the entire lifetime of a
relationship.

1. Set customer expectations

The first step to building better customer retention is to set client expectations early. The
earlier the better. Don‘t wait.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 24
Shannon Kohn from Datto wrote a great article highlighting the importance of
companies‘ setting expectations through service level agreements (SLAs).

A great way to foster loyal customers is to “under promise and over deliver” on the
expectations you originally laid out in the SLA. For instance, Datto states in its customer SLA
that any ticket submitted with an “urgent” priority will be replied to within one hour. In
reality, the response time on those tickets is closer to five minutes.

By setting expectations early and a tad lower than you can provide, you can eliminate
uncertainty as to the level of service you need to offer to ensure your clients are happy. This
clear vision enables your company to build KPIs around specific expectations and ensure you
are always over delivering.

Clients tend to remember negative experiences. So if you have over delivered on the past
20 occasions, but, once, you undelivered – your client will no doubt quote that negative
experience as a reason to cancel his or her contract with you.

Let‘s take a look at an example. R & G Technologies, a successful Australian IT Company,

has adopted a service-based model that has placed R & G in the top 15% of all managed
service providers due to R & G‘s response speed (as measured by Client Heartbeat). R & G
has implemented strict SLAs, which work tightly with their employees‘ KPIs. Jason Neville,
General Manager of R & G, explains that his employees are incentivized to meet specific
KPIs exceeding client expectations.

All Service Desk staff have 10-15% of their salary tied to delivering on our Service Level
Agreements. If we break more than 1 SLA for the month, the entire service desk receives no
bonus. Similarly, each individual service desk team member receives a bonus which is tied to
the number of tickets they close for the month – so we encourage both individual and team
based performance to achieve our goal.

2. Be the expert

Small and medium-sized businesses are becoming more and more dependent on services to
run their operation. No matter what industry you occupy, if you can be the expert in your
particular field, you will likely retain more customers.
| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 25
Becoming your customers‘ trusted advisor will build customer loyalty and reduce customer
churn. Let‘s revisit the example with R&G Technologies. If you were an IT Company, you
should aspire to be the technology guru. Then your responsibilities will transcend the bare
minimum your contract entails. If a customer wants advice on the most suitable mobile
phone, you better be ready to assist that customer in choosing a device.

Becoming a trusted source on all technology, you build a relationship that leads to a
dependency. Your customers will trust you, rely on you to give the best advice, and recognize
you as an integral part of their business success.

If you want to build trust with clients, identify industry-specific problems currently facing
those clients. Compliance and regulations are popular buzz words among small businesses,
so, as an IT Company, this provides a perfect opportunity to demonstrate your expertise and
build trust with your clients.

Give your clients a quick courtesy call – inform them of upcoming changes and provide some
insightful recommendations as to their best plan of attack. This proactive, personalized
approach will bolster customer loyalty and render other customer retention strategies more
effective.

Chris Herbert, Managing Director of Effective IT, another Australian IT Company with some
of the highest ‗Partnership‘ scores worldwide (as measured by Client Heartbeat) states:

Being a trusted adviser takes time and a real focus on becoming an integrated part of our
client’s businesses. We want to be their one stop technology advisor and that means you have
to be comfortable from helping them with everything right from their new mobile phone, to
scheduling and running strategic IT meetings. Above all else, I think the reason we have such
high partnership scores is our customers trust us implicitly. We always give them unbiased
advice even if we don’t make much money in the short term. We know the names of all of the
staff that work for our clients. Even something as simple as popping in when one of our team
is in the area for a quick, free walk-around builds trust – so they don’t think every time you
appear you are selling something or on the clock. If you put their interests first, eventually
you are rewarded with trust, and that is the most important part of a long term partnership.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 26
3. Build trust through relationships

As the age old saying goes, you do business with people you trust. Trust is essential in
business, and building relationships with clients will garner that trust.

A study by the African Journal of Business Management found that as trust increases,
commitment tends to grow. The study then recommends building trust through shared values.

So what are shared values?

Cultivating shared values means taking an interest in your clients and their business. Do some
research on their business, understand how you play a role in their day-to-day activities, and
use this information to strengthen your relationship. A good way to start is by asking one
simple question the next time you stop by for a quarterly check-up.

“What differentiates you from competitors?‖ Once they answer, remember that and make a
note to do some extra research and find ways that you can assist them with strengthening that
point of differentiation through the services you provide. Give them a follow-up call the next
week and let them know what you came up with. This shows you have a shared value and
are genuinely interested in their business.

Simply providing a service is no longer sufficient– as competitors enter your market, you
need to start building shared values with clients and showing you take an interest in them and
their success.

This leads me to my next point, implementing a relationship marketing

strategy. Relationship marketing is a term that has popped up everywhere in the past couple
of years. This is of particular importance because you are a service-based business.

To get you started, here are two quick ideas:

 Implement a monthly email marketing campaign

This is a lot easier than it sounds. You want to email your existing customers once a month.
Touch base with them, inform them of any recent news or services, and share a couple of

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 27
great articles you think will help them with their business. You should also link to your
articles (see below) as a way to drive your customers to your blog.

 Start a blog

Write a weekly article on something interesting you accomplished that week, an

accomplishment you feel your customers would value. Perhaps you began offering a product
that can help save your clients 20 minutes a week or released a whitepaper that provides great
insight into employee management. Be consistent with your blog and start using it as a way
to build relationships with your customers.

4. Implement anticipatory service

Anticipatory service is a proactive approach to customer service. Instead of waiting for

problems to occur, a company that implements anticipatory service can eliminate problems
before they happen.

Aspect wrote a white paper, Four Reasons Why Proactive Customer Care Means Customer
Loyalty, which explains the science of customer relationships as being simple – the value you
get is proportionate to the value you give.

To achieve and maintain this harmony, today’s companies must establish a dialogue with
customers that shows an awareness of their information needs and respect for their
communication preferences. The more contacts made with a customer, the “stickier” that
customer becomes. When customers are consistently given valuable information, this
stickiness can form a durable bond of loyalty.

Let’s take a look at two examples of anticipatory service:

 A major airline proactively texts customers to advise them of flight delays.

 A corporate billing department alerts customers when an invoice is nearly due.

In both of these examples, the company is taking a proactive approach to what could become
a problem that results in a negative experience. With the airline, no one likes to arrive at the
airport and discover that the plane has been delayed for 50 minutes. Likewise, with the

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 28
corporate billing department, you don‘t want to be hit up for reminder invoices and late fees
when these reminders could have been sent prior to the deadline.

You should be looking at ways you can stop problems from happening by being proactive. A
good idea that you can implement today is a quarterly or half yearly on-site check-up.

Let’s see how it works:

So you have a client who hasn‘t had any problems for four months. Everything is running
smoothly. Your tech guys‘ setup was perfect, and there have been no dramas since. Instead of
just playing the waiting game, you should schedule an on-site check-up. Have one of your
guys check in with your client to see if everything is running smoothly and double check that
the processes you set up earlier are all still in place.

By being proactive – you can save yourself a lot of reactive problem fixing in the long run
and build the perception that you are the type of company that consistently offers
‗anticipatory service‘ with your customers.

5. Make use of automation

Automation tools allow for time-consuming tasks requiring manual intervention to be

standardized into repeatable processes. Companies that leverage automation are able to
minimise downtime and keep clients‘ networks performing at their best.

Companies are typically bound by contracts that guarantee their services and make them
accountable to clients. By leveraging automation tools and streamlining repeatable
processes, companies can better meet their commitments.

By standardizing your processes and setting expectations for service levels, you can increase
customer loyalty, which will lead to improved customer retention rates.

6. Build KPI’s around customer service

A great way to improve customer retention is to improve customer service. As outlined at

the beginning of this post, 68% of your customers leave because they are dissatisfied with

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 29
the service. The team at R&G Technologies faced similar numbers. The team set out to
rectify the problems right at the source.

R & G implemented customer service KPIs built around their contractual agreement. This
way, every R&G employee‘s performance was measured and incentivized based on their
level of service, which was closely tied to the client‘s goals.

Let‘s hear details about this initiative from Jason Neville:

Customer satisfaction is measured quarterly through Client Heartbeat and is tied directly to
employee KPIs and compensation. We operate in a model with senior engineers assigned to a
group of customers. If they do not achieve 8/10, then they fail to achieve their KPI. This is
also tied back into a company goal and bonus structure.

7. Build relationships online

Your clients are online, so let‘s start building relationships with them while they are glued to
their computer screens. With the rise of social media, connecting with your clients through
these mediums makes sense. I would focus my efforts on building social profiles
on LinkedIn, Twitter, and Facebook. The majority of your clients will have active profiles
on at least one of these Web sites.

Debra Ellis from Social Media Today asserts that social media is changing the playing field
by providing a venue for the one-to-one connections that create unbreakable bonds.

Connecting with customers and building communities takes more effort and time than typical
social media acquisition strategies.

To get started, I remember taking the following three actions:

 First, set up a Linkedin group, a Twitter profile, and a Facebook page.

 Include links to your profiles in all future communications with clients.

 Now use these channels to aggressively communicate with your customers. Start
linking out to valuable and relevant content, share your thoughts on topics, and
engage with clients who leave comments and feedback.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 30
For companies struggling to find topics to post about on their social media channels,Scott
from MSP Business Management recommends the following:

 Product news updates

 Short pieces on key news, such as virus outbreaks or high-profile system outages

 Case studies featuring your clients

 Reviews of new software

 Details of new services you offer

8. Go above and beyond

Oftentimes, companies overlook how important this is. Going the extra mile for your
customers is an easy way to build strong relationships. As a service business, you have
countless opportunities to woo your clients and transcend the minimum.

By doing this, you can build some serious long-term loyalty. If your clients know you are
prepared to go above and beyond, they will stick with you when competitors start knocking
on their door.

Here are a couple of ways you can go that extra mile for your clients:

 Pay attention to what your customers want and make their issues your issues – be
proactive in addressing them.

 Isolate potential issues and fix them before they become problems.

9. Implement customer feedback surveys

Customer churn can be avoided by simply listening to your customers. Customer feedback
surveys are invaluable for learning how your service is performing in relation to your clients‘
expectations.

Qualtrics defines customer retention as being individualized and varied across the kind of
product or service provided, the kinds and number of customers served, the longevity and

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 31
frequency of customer/supplier interactions, and the strategies you have chosen to grow your
business.

Client Heartbeat has identified three key metrics you must monitor to measure customer
retention most effectively:

 Firstly, you should monitor customer feedback on an individual level. Comparing

feedback across a broad range of customers would be a waste of time. You must
narrow the data down to a specific client, see what that client thought, and take
action from there.
 Secondly, you need to trend feedback across a period of time. You should track
feedback survey to survey so you can see which areas have improved and which
have suffered.
 Thirdly, you want feedback from customer surveys to provide intelligence. You
need it to provide you with data regarding what customers are at risk, which areas
of your business need improvement, and where your strengths lie.

This feedback will help you retain clients. By understanding client feedback, you can take
action before it‘s too late and make business decisions based on real data-driven feedback.

Retain more customers

The above nine customer retention strategies will empower you to not only strengthen your
client relationships but also boost your bottom line.

3.6. Retention and Prevention of Defection (16 mark)

Every customer that you keep represents at least three that you don’t have to
attract. Numerous research studies indicate that the cost of acquiring a new
customers usually runs from two to four times the annual cost of keeping an existing
customer. Obviously, an effective customer retention strategy translates into profits.
It has been estimated that most companies spend about 98 percent of their time reacting to
problems and less than 2 percent preventing them. The first, most important, way to prevent
customer defections is to identify and define each problem from the customer‘s vantage

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 32
point. This blog suggests several ways to retain customers once you understand the problems
and their ramifications.

Superior service and database management provide your best defense against customer
defections. Service provides the opportunity to solve customer problems and build
partnerships; the database serves as a vehicle to personalize customer communication and
enhance your relationships.

Establish a Customer Baseline

In order to develop a successful retention program, you must have accurate and complete
information about your customers. In my experience, at least 5 percent of the information in a
typical customer database is inaccurate. Errors translate into wasted money, customer
aggravation and loss of credibility.

You should know the following basic information about your customer base:
 Number of current customers

 Average number of new customers you expect to acquire within the next
month/quarter/year

 Average number of existing customers you expect to lose within the next
month/quarter/year

 Where will those customers go?

 Why will they leave you?

 How will you know they‘ve left?

 What will you do to retrieve them?

Customer Service as a Retention Strategy

A successful service strategy serves two vital functions: defense and opportunity.
1. Defense: Quality service provides a powerful barrier against competitive threats
because it gives you the chance to:
 Ensure your customer‘s successful experience with your products;

 Demonstrate your competence, expertise and reliability;

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 33
  Discover customer needs, problems and desires; and

 Earn credibility and respect.

2. Opportunity: Quality service also provides the opportunity to:

 Build a meaningful, interactive relationship with each customer;

 Earn their good will and trust; and

 Motivate purchase/re-purchase decisions.

Both ingredients are critical to developing and sustaining a genuine interactive partnership.

The delivery of consistent quality service requires an unmitigated commitment to delighting

customers. A superior customer service attitude must permeate an organization, where all
persons take responsibility for participating and contributing fully to the enterprise.

Everyone within the organization must follow the guideline that, when a problem does
arise, “fix the customer first,” then solve the customer’s problem. This sequence supports
the goal of building customer partnerships that will endure over time, rather than reacting to a
series of isolated problems.
The best ideas and plans are useless without people to implement them. In order to achieve an
attitude of respect and concern toward customers, your organization must invest in each
employee over time. Customer service is a multifaceted process that occurs inside and outside
the boundaries of an organization. When employees have the training, tools, support, and
appreciation of their company, they are eager to act in the mutual best interest of the
company and the customer.

Understanding Customer Defections

Usually, customers defect because they are disappointed, they feel let down, and their
expectations are not met. If you don‘t really know what customers value, how can you
possibly succeed in delighting them?

Customer expectations derive from wishes and wants as much as actual needs. This
explains why customer satisfaction does not guarantee customer loyalty. You may respond
adequately to a customer‘s specific service need but fail to understand their expectations and
their desires.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 34
For example, the real issue may be that a customer wants to feel appreciated for giving you
their service business when any number of other competitors could comply. Unless you ferret
out their expectations, you may miss opportunities to delight your customers. Or you may
realize the customer‘s wish to be appreciated but not know what ―appreciation‖ means to the
customer.

The key to pre-empting defections is to focus on the root causes.

Customers defect for two primary reasons:

1. The need for your product or service has ceased, or

2. Your offering has failed to satisfy their needs in some way.

Some of the less obvious barriers to customer retention may be understood by

answering the following questions:
 Are defections seasonal?

 Are there price differentials during the product/service lifecycle?

 Do defections have a pattern: location, person, lifecycle phase?

 Is there a correlation between retention rates and price changes?

 What is the industry norm for customer longevity?

 Which company has the best retention rate? Why?

 In what specific ways do your customers feel valued and appreciated?

 In what ways do your customers feel your complacency or indifference?

 In what ways do your customers feel intimidated and/or ignored?

Defections of good customers cost you dearly. You lose base profit as well as profit from
incremental purchases, profit from reduced operating expenses, profit from referrals and
profit from price premiums.

Christine S. Filip, president of marketing, design, and public relations firm, the success
group, wrote in the CPA Journal that when a good customer leaves, you will need at least
three new ones to replace the revenue stream.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 35
It is estimated that defecting customers will tell eight to 10 people about their negative
experience with your company. One in five will tell 20 people.
Conversely, a referral from a loyal customer has a 92 percent retention rate vs. 68 percent for
a customer acquired from advertising.

This is just one measure that indicates the value of word-of-mouth impact.

Database Marketing

An accurate, comprehensive database enables one-on-one marketing to your best customers.

When you communicate individually with your customer, that communication tells them that
you know them, remember them and care about their needs.

Personal attention, empathy and extra effort will work to:

 Increase response rates,

 Provide direction for product and service development efforts,

 Improve sales forecasting,

 Provide opportunities to test your marketing mix, and

 Support your marketing decision making process.

In order to function as a viable resource, a company must have an effective marketing

database that includes:
 ID of customers and prospects by name and address,

 Individual account numbers for each customer,

 Relevant demographic information,

 Purchase information such as transactions, payment records, records of inquiries and

interactions with the company, product preferences and interests, competitive usage,
and information about corporate culture.

Obviously, this data is virtually worthless unless you can manipulate and manage it to discern
trends, patterns, and histories. Only then can you capitalize on successes, identify concerns
and use the information as the basis for decision-making.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 36
Customers want to feel like individuals, not prospects, consumers or targets. A good
customer database can provide a foundation upon which to build authentic customer
partnerships through welcoming NEW customers, thanking existing customers and inviting
new prospects to begin a relationship with you.

The database can be used further to:

 Examine purchase behavior information to forecast incremental sales and profit
potential;
 Correlate, cross-reference, and analyze data to understand customer preferences and
trends;
 Personalize messages, identify and contact new customers, enhance cross- selling
opportunities and sell more (and more often) to existing customers;
 Provide special benefits and services not available to the general public; and
 Speak with one congruent, consistent voice (image and vision) through collateral
material, letters, press releases, signs, graphics and departmental communications.

Survey Data as Intelligence

Building and maintaining a current, accurate, comprehensive customer data base is much
more easily said than done. Compilation, management, and maintenance requires a
significant allocation of resources (people, time, money), along with a total commitment to
customer service and retention throughout your company.

The goal is to increase your ability to offer each of your best customers the products and
services they need and want, as well as to identify and communicate with potential customers
who have similar characteristics.

Proprietary customer information can be collected through:

 Customer interaction records (purchase transactions, service calls, payment history);
 Customer surveys (written and verbal) that measure satisfaction, loyalty, intent to
purchase, perception of quality, expectations and outcomes; and
 Focus groups (targeted population segments).
Secondary data, such as industry statistics and census data, provides a general context and
reference for comparisons, market share calculations, trend analysis, and other strategic
marketing functions.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 37
Of course, the most difficult task is to gather accurate competitive information and
substantive NEW customer information. I suggest creative ethical sleuthing and discerning
investment in well-chosen targeted research.

A few important things to remember about customer surveys:

 Define clearly what you intend to measure (satisfaction, dissatisfaction, loyalty,
retention, quality, service), and why you want to know it.
 Experience your company from your customer‘s perspective.
 Understand the following:
 The relative scale of loyalty within your customer base;

 The strength of your relationship relative to your competition;

 The relevant antecedents to loyalty;

 he relative effect of various interactions, activities and consequences.

Because profitability depends on what customers actually do, not what they say they will do,
you should include a process for reconciling customers‘ intentions with their actions.

Building customer loyalty and improving retention have significant implications for
profitability.

According to Filip’s article, a 5 percent improvement in retention rates can raise profits
from 15 percent to 50 percent.
The most profitable firms enjoy retention rates of 93 to 95 percent; the average firm has a 78
percent to 85 percent retention rate. The cost of finding a new customer is five to six times
more expensive than keeping a current one, so it behooves you to manage your customer
retention rates proactively.

 Pay close attention to your best customers. Act quickly (within 24 hours) on their
requests and dissents.
 Stay in touch with your customers. Be willing to hear accurately and integrate their
feedback throughout your company.
 Find out exactly why a customer defected. Act immediately to determine the
possibility of rectifying the situation.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 38
 People seek relationships (personal and business) that are caring, honest and respectful.
Superb service provides the foundation from which to develop and maintain genuine
partnerships with your customers. In many companies, the customer service personnel have
more contact with customers than the sales people.

Another point that is often overlooked is that customer service personnel get inside the
customer organization much easier than the sales people who most often have to get in
through the front door. The customer service personnel usually bypass the front door and
go directly to the area with a problem. Once inside, it is not uncommon for the customer
service personnel to understand what is going on inside the customer organization.
Build your customer database right. Record everything that your customers do, say or buy,
then use the information to fine-tune future communications. As you develop trust and
credibility with your customers, they will reward you with their business and their referrals.
The bottom line is that companies need to understand the value of keeping a customer.
Secondly, companies should spend more time and energy to preventing problems. Finally,
companies should keep an accurate data base of their customers.

3.7. Models of CRM

Managing customers profitably is the core objective of company. How to manage customers?
this is the question that ask very frequently. for this question many researchers and managers
try to dig out the solution. There are number of CRM models are developed learn how to
manage customers. CRM models are helpful to understand the concept of CRM and regulate
the modern concept of CRM.

We are discussing here:

1. IDIC Model

2. QCI Model

3. CRM Value Chain Model

IDIC MODEL
The IDIC model was developed by Peppers and Rogers. This model suggests that companies
should take four actions in order to building, keeping and retaining the long term one-to-one
relationships with customers.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 39
· Identify

· Differentiate (value, need)

· Interaction

· Customize

Identify

First a company must identify who is actual customer and should know about deep
knowledge of their customers. It is not only necessary to know about your customers but you
have to know about more and more your customers so that you can easily understand them
and serve them profitably.

Differentiate

Differentiate your customer on two bases: value and need

Value: Differentiate your customer to identify which customer is generating most value now
and which offer most for the future. Give more value to those customers who are generating
more value for you.

Need: Differentiate your customers according to their needs. Different customers have
different need and serving the in profitably ways need more knowledge about their needs.

Interaction

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 40
Company must emphasis on interaction with customer to ensure that you understand
customer‘s expectations and their relationship with brand. Company must consider
Interaction with customers according to their needs and value that they are providing you.
Interaction directly with customers makes believe that company has concern with them and
company wants to serve them individually. These efforts make customers loyal and help
company to build long term relationships.

Customize

When you differentiate your customers according to their values and needs, after that, you
have to customize your product according to their needs and values. Customize the offer and
communications to ensure that the expectations of customers are met. Interact to customize is
information to customers about your ability to cope with their need.

Failure in the third step means something wrong with second or third steps. So return or go
back to previous steps study them again and search out more and more and rearrange these
steps.

QCI MODEL
The QCI model is also a product of a consultancy firm. 19 The model‘s authors prefer to
describe their model as a customer management model, omitting the word ‗relationship‘. At
the heart of the model they depict a series of activities that companies need to perform in
order to acquire and retain customers. The model features people performing processes and
using technology to assist in those activities.

QCI model is also known as quality competitiveness index model. This model includes the
series of activities related with employees, people and organization and technology as well.

According to this model, relationships process with external environment. Because when
customer wants to start selling process or wants to interact with organization, external
environment directly affects the customer experience. External environment also affects the
planning process of the organizations.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 41
Now as you can see in the figure that customer experience affects three activities future:
customer proposition, customer management activity and measurement.

Customer proposition means something that a company offer to customer against the price.
Customer management activity is a process of capturing customers, start with targeting,
conversation, selling and end with retaining or winning back the customers. Customer
management activity affects customer‘s experience that how a company acquires, retains a
customer and also penetrates. Finally measurement process also affects the customer
experience.

People and organization have relation with planning process, customer proposition, customer
management activity and measurement. Because CRM start with people and end with people.

Infrastructure deals with organization in a sense of technology, customer information and

process management.

One big thing is that each activity, people, organization, process and technology has dual
effect and inter correlated with each other.

CRM VALUE CHAIN MODEL

CRM, the meaning of those three letters, is emotionally contested. For some, CRM is simply
a bridge between marketing and IT: CRM is therefore an IT-enabled sales and service
function. For others it‘s little more than precisely targeted 1- to-1 communications. Simply
we can say, CRM Is a tool to manage customer relationships with the help of people,
information technology, customer‘s data, company‘s process and customers themselves.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 42
The CRM value chain is a established model which businesses can easily follow when they
developing and implementing their CRM strategies. It has been five years in development
and has been piloted in a number of business-to business and business-to-consumer settings,
with both large companies and SMEs: IT, software, telecoms, financial services, retail,
media, manufacturing, and construction. The model is based on strong theoretical principles
and the practical requirements of business.

The ultimate purpose of the CRM value chain process is to ensure that the company builds
long-term mutually-valued relationships with its strategically-significant customers. Not all
customers are strategically significant. Indeed some customers are simply too expensive to
acquire and service. They buy little and infrequently; they pay late or default; they make
extraordinary demands on customer service and sales resources; they demand expensive,
short-run, customized output; and then they defect to competitors. These are called
strategically-insignificant customers.

Five primary steps to profitable relationships

The five steps in the CRM value chain are customer portfolio analysis, customer intimacy,
network development, value proposition development and managing the relationship.

Customer Portfolio Analysis

CPA, the first step in the CRM value chain acknowledges that not all customers have equal
value to the company. CPA asks the question: ‗who are our SSCs (strategically-significant
customers)?‘

SSC‘s is defined thoroughly above so let‘s move toward CPA. CPA tells us what our
customers giving value to us?
| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 43
A customer portfolio comprises the mixture of groups that make up the customer base of a
business. For example, Coca-Cola's customer portfolio consists of restaurants, grocery stores,
amusement parks and sports arenas.

It means before starting the CRM process, an organization should know about their customers
thoroughly.

Customer Intimacy

Selecting customers to serve with your product is one thing and knowing about your
customer is another thing..Most companies collect customer data. Some industries are
overwhelmed with information – scanner data, loyalty card data, complaints files, market
research, and geo demographic data. Now question is how you will use this data in order to
serve best ways to your customers. Long term relationships require more knowledge about
you customers. Knowing about what, who, why, when and how of customer behavior is most
important for a company to manage long term relationships with loyal and strategically-
insignificant customers.

Develop the Network

A company‘s network position i.e. its connectedness to other parties who co-operate in
delivering value to the chosen customer, is a source of great competitive advantage. In order
to serve customer‘s relationships, it is important for a company to create value for customer
on every stage of selling process. It means company must create a complete network for
customers to serve profitably. A good network may contain suppliers, manufacturers,
employees, investors, technology, distributors and retailers. CRM is not a quick fix; it
requires owners and investors who will commit to the long-term investment in the people,
processes and technology to implement CRM strategies.

Value Proposition Development

By the fourth step of the CRM value chain, you will know who you want to serve and will
have built, or be in the process of building, the network. Now the network has to work
together to create and deliver the chosen value(s) to the selected customers. Network develop

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 44
 by company now will create value proposition. Every member in a developed network works
together as a whole to creating value for customers.

Managing the Relationship

This is the final step of primary stages. All previous steps help the company to create the
relationship and start the relationship. Now this is depend on company how a company
manage these relationships so that parties, company and customer, get value for the long
term.

Five supporting conditions of CRM value chain model

These are five supporting conditions to fulfill the CRM value chain model.

1. Culture and leadership

2. Procurement processes

3. Human resource management processes

4. IT/Data management processes

5. Organization design

These are some basic conditions that a company even must consider while managing the
CRM. Company‘s culture define that whether you will manage long term relationship or not
because some time your culture doesn‘t allow you to do such activities. Company
procurement process and HR process also suggest that how you will do such activity.
Without IT and Data management process you cannot do CRM because customer‘s
information and data related to customers saves on technology. Organization design helps to
manage the relationships.

3.8. CRM Road Map

3.8.1. What is CRM Road Map? (2 mark)

A CRM Roadmap is a strategic plan that identifies how an organization can meet and exceed
its customers' needs. This includes, but is not limited to, assessing how the sales, marketing
and service entities work together to:

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 45
 1. gain insight from their customers (e.g. purchase history, desired products/services),

2. produce valuable offerings/products (e.g. personalized product) and

3. provide the ultimate customer experience (e.g. multiple touch points, 360 degree view

of the customer).

3.8.2. CRM Road Map…How?

• So how do organizations know which CRM capabilities they have, and which they
need to realize their strategic goal?

• Now we will see primary steps (which have been used cross-industry, including
financial services, electronics and high-tech, consumer products, manufacturing, etc.)
to follow when developing a CRM Roadmap.

3.8.3. Steps in CRM Road Map

Step 1: Gain Senior Level Sponsorship

• The ―sponsor‖ for a CRM Roadmap effort must have a vested interest in the project
and ideally has P&L responsibility for the group to be impacted.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 46
 • As with any project an organization undertakes that involves significant change to
business processes, organizational structures, or roles and responsibilities, the lack of
key, influential sponsorship reduces the effectiveness of the project, since there is no
driving force for implementation.`

Step 2: Gather Information

It is critical to gain insights of various key stakeholders and decision-makers within the
organization.

Examples of questions that help gauge the health of the client's CRM include:

• How would you define CRM?

• What types of customer information is captured/tracked (acquisition/retention costs,

churn, cost to serve, etc.)?

• What information would you like to know about your customers that you currently do
not?

Done by interviewing Executives, Managers, Marketers, Front line staff.

Step 3: Assess Current state and Define Future state Gaps

• Through these meetings, we gain an understanding of the client's current CRM

capabilities and significant opportunities to improve their customer relationships, and
map out findings.

• Also important to understand company's future direction (usually between 6 months

and 2 years).

• Then comparison of current state of CRM against best practices within the companies
respective industry.

Step 4: Identify Value Opportunities

• Value opportunities represent the potential benefits delivered by being more

customer-centric.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 47
 • Identify and categorize value opportunities along the lines of people, process and
technology.

• Example of a "process" value opportunity is improving data capture for all customer
contacts across sales functions and touch points (e.g. phone, e-mail, etc.).

• "People" value opportunities may involve additional training on service procedures

for capturing customer data.

• "Technology" value opportunities might include developing a data warehouse.

Step 5: Link Value Opportunities to strategic CRM Capabilities

• After determination of where the value opportunities lie. Identification of which

strategic CRM capabilities are needed.

• Below is a sample of link between a specific value opportunity and its corresponding
strategic CRM capabilities:

Value Opportunity :

• Improve customer understanding

Strategic CRM Capability:

• Possess good knowledge of the customer

• Leverage customer information from the service process

• Understand customer profitability and cost-to-serve.

Step 6: Define CRM Projects and Requirements

• Once value opportunities are prioritized, specific CRM projects need to be developed.
Defining and executing CRM projects will ensure the company masters the relevant
strategic CRM capabilities.

• An effective way to define relevant projects is through brainstorming sessions with

the client. Samples of the outcome of a session might include:

• Understand customer profitability

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 48
 • Enhance call center operations by implementing sophisticated touch-point
technologies

• Establish a data warehouse

• Improve sales force training

Step 7: Develop Business Case

• Once the projects and requirements are defined, it is necessary to develop the business
case to support or refute the criticality of a specific project. The business case seeks to
justify the money investment needed and the ROI. Each business case should include:

• Details and costs of required resources (people, technology, training, outsourced

resources, etc.),

• Projected duration of time of each project.

• Potential benefits

• For example, a typical CRM investment ranges from $10 to $25 million (or more)
over a three to five year period. The amount is wholly dependent upon how many
initiatives have been identified and how extensive those initiatives are. Examples:

• Marketing Insight initiative

• Sales force automation initiatives

Step 8: Develop a Roll-out strategy

• Developing a roll-out strategy enables organizations to focus their resources, money

and time on the most important projects that help them become customer driven.

• Prioritization and phasing of projects is conducted with the executive team, a process
in which they evaluate the results of the business cases, and consider for each project's
financial results, duration, level of effort required, and technical impact.

• Critical Success Factors

3.8.4. Steps in Roadmap to CRM Success

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 49
1. Identify Your Strategic Team

Your strategic team will be responsible for communicating with your users and getting
feedback on any issues that arise during and after implementation. They can take a role in
prioritizing new projects, making sure they will be beneficial in meeting your company‘s
objectives. As you go through this journey, they will generate excitement and create the
culture necessary for user adoption. Think of them as your ―CRM Champions‖.

Your team should include key stakeholders who can represent cross-functional roles (i.e.
sales, marketing, service, sales support). An executive member will also be needed to ensure
your initiatives meet the corporate objectives. Don‘t forget to include a project leader (BA)
on your team that understands your business, its customers and the CRM capabilities.

Tip: Pick team members that have good relationships with their colleagues, are respected,
and are early adopters.

2. Create a Vision & Objectives

Your vision and objectives will be used as the ―acid test‖ during your implementation and to
prioritize any future CRM projects or initiatives. Use them to start developing the culture
that is necessary for important business change. The objectives must be measureable and
support the vision. Make sure that you can validate your objectives using
dashboards/reports. For example, one objective may be to increase win/loss ratio of all
opportunities by 30%.

Tip: Think about creating an internal marketing campaign to promote CRM and the goals
that must be achieved.

3. Identify Pain Points

Identify pain points from each key stakeholder. Create a list. This will be used to help
strengthen user adoption by giving some ―wins‖ to each. Remember to check against your
objectives and kill two birds with one stone!

Tip: Have any excel spreadsheets that are used by several users to capture critical
information? Think about embedding it as a custom object in your CRM. It will save them
time and allow you to build metrics from the data captured.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 50
4. Map Business Processes

Mapping out business processes will help you understand how to leverage and properly align
your CRM to your company‘s overall business objectives and your customer‘s needs. Make
sure that you work with each business unit and understand what their process is. Review the
flowcharts and get sign-off once you have agreement that the process accurately reflects their
business flow. Every step should have one owner who is accountable for its success.

Process maps have several benefits. They include: a quicker learning curve for new
employees, greater productivity, and a means to automate workflows. All will result in
reducing costs. To find out more about the importance of business processes read ―What's
Happening Behind The Scenes May Be Holding Your Company Back!‖

5. Align CRM to Business Processes

Customize your CRM so that it is aligned to your processes. Understand how the technology
can be leveraged (workflow automation, workflow approvals, data validation, etc.) to
improve productivity and increase visibility. Make sure you check your objectives to see if
they have been met. Focus on the top highest value processes and consider phased roll-
outs. Results: quick payback on your investment, quicker learning curve of the application,
and less resistance by users to adopt.

6. Import Quality Data

Data quality is critical to CRM success and user adoption. Time must be taken to identify all
data sources and ensure data quality and integrity prior to importing into your CRM
application.

Tip: Gather all legacy data and place into an excel spreadsheet. This will give you an easy
means to de-dup, improve quality and standardize on formats such as state/province and
country codes. You may also want to look at a 3rd party tool such as demand tools, if you
have a large amount of data.

7. Create Powerful Analytics

Creating reports and dashboards will help ensure your checks and balances are in
place. Make sure that you have KPI‘s and other metrics that benefit your executives,
managers, and users. Generate metrics to help track user adoption, track if you are meeting
your objectives, and monitor data quality.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 51
8. Test before Release

Test, revise, and test again using a small pilot group that represents each business process
owner. Gather information and recommendations that they OFFER to help streamline and
make your CRM application as foolproof as possible. This step will minimize catastrophes
during training and in the first few weeks after deployment. Make sure that your pilot group
is ―onboard‖ as they will spread the word as to their thoughts on this new system!

9. Train Users

Make sure that all key stakeholders and users understand how to use your CRM
application. This not only includes ―rules of engagement‖, but also the terminology of the
data, especially in pick lists. This will help ensure that your organization captures accurate
data resulting in accurate analytics which is crucial to user adoption.

Tip: Create a CRM guide and worksheet for each group (i.e. sales, marketing, and
service). The worksheet should include exercises that are relevant to their required CRM
tasks.

10. Review & Evaluate

CRM is a long term solution that can grow with your organizational and customers‘
needs. Make sure that you look for continual improvements and projects that will add value
to your business. By thinking and breathing ―CRM‖, your organization will get great value
and success from its use.

| This material is proprietary to KV Institute of Management, a Nationally Ranked BSchool in Coimbatore and cannot be copied or duplicated for use outside of KV.
Violators will face infringement proceedings of copyright laws. Page 52