Customer relationship management

and online decision making

Customer relationship management
 CRM is a business strategy designed to
optimize profitability, revenue and
customer satisfaction.
 CRM is a business strategy that aims to
understand/appreciate, manage and
personalize the needs of an organization's
current and potential customer.
 Need for CRM:-
 Provides updated information- providing
product information and technology
assistance with an accessibility for 24 hours
a day, seven days a week.
 Customized strategies:- identifying the
difference in qualities perceived by different
customers and then by designing a suitable
service strategy for each customer based on
expectation.
 Anticipates problems:- helping identify
potential problems quickly, even before they
occur.
 Prompt follow-up:- providing a fast
mechanism for managing follow-up sales
calls to assess post-purchase problems, re-
purchase probabilities, repurchase times,
frequencies, etc.
 Problem resolving mechanism- providing a
fast mechanism for handling problems and
complaints., etc.
 Assess customer interests:- using
internet cookies to track customer
interests,
 Integrating functional system:-
integrating other functional systems and
thereby providing accounting and
production information to customers when
they need it.
 Importance of CRM:-
 Increased sales revenues and reduced cost of
sales
 Increased win rates
 Increased margins
 Improved customer satisfaction
 Decreased general sales and marketing
administrative costs
 Lower costs of recruiting customers
 Increased customer retention and loyalty
 Evaluation of customer profitability
Difference between mass marketing
and CRM
Mass marketing  CRM
 Discrete transactions  Continuing
 Short term emphasis transactions
 One way  Two way
communication communication
 Acquisition focus  Retention focus
 Share of market  Share of mind
 Product  Customer
differentiation differentiation
 Types of CRM:-
 Operational, collaborative and analytical
CRM-
 Operational CRM- it is also know an front
office CRM, it involves the areas where
direct customer contact occurs.
 These interactions are referred to as
customer touch points.
 The customer touch points are classified
into:
1. Face-to-face touch-points:-
sales/service/channel/events/stores/prom
otions.
2. Database-driven touch-points:-
telephones/e-mail/mail/SMS/fax/loyalty
cards/ATM’s
3. Mass Media:- Advertising/website
 Operational CRM enables and streamlines
communication to and from the customer.
 Optimization means letting marketers plan
and prioritize all inbound and outbound
customer communications.
 Collaborative CRM:- Collaborative CRM
is a specific functionality that enables a
two-way dialogue between a company and
its customers through a variety of
channels to facilitate and improve the
quality of customer interactions.
 Analytical CRM:- also known as back-
office or strategic CRM, it involves
understanding the customer activities that
occurred in the front-office.
 It involves analyzing large amounts of
cross-functional data using data mining
and other methods and feeding the result
back to operational CRM.
Strategies for Building Relationship
Marketing
 People
 Process
 Product
 Organization
 Setting satisfactory service standard
 Concentration on competitors
 Customer analysis
 Cost analysis
 Concentration on paying ability of customers
 Knowledge on purchase behavior pattern
 Differentiation in price and quality standardsm
Cont.
 Focus on reducing dissatisfaction
 Attention on changing requirements of
customers
 Concentration on performance
 Training to supply chain employees
 Empowerment to service providers
 Develop partnership with customers
 Organizing customers clubs
 Customers complaint monitoring cell
 Focus on preventive actions
 Building switching barriers
 E-CRM:-
 Provides companies with a means to
conduct interactive, personalized and
relevant communication with customers
across both electronic and traditional
channels.
Need for E-CRM
 it can be broadly divided into three parts:-
1. Business point of view
 Reaching the customer in a lesser time
 Building customer information database
 Speeding up the processes
 Being cost-effective
 Reaching the mass; and
 Sharing and generating knowledge
2. Customer point of view:-
 Easy accessibility
 Wide choice
 Displaying empathy
 Providing reassurance
 Increasing reliability
 Adding a personal touch
 Increasing customer loyalty by reducing
the cost per unit
3. Market point of view
 Improving returns on investment
 Large players and big markets
 Healthy competition
 Industrial growth
 Capital generation
 Identifying and exploring new market
opportunities
 Tuned marketing
Difference between CRM and e-
CRM
 CRM  E-CRM
 Customer contacts-  Customer contacts-
traditional means-retail through internet, e-mail,
store, telephone or fax wireless, mobile and
 System interface- works PDA technologies
with backend application  System interface-
through ERP system designed for front-end as
 System- it requires PC well as backend
clients to download applications through
various applets and ERP, data warehouse,
applications data mart.
 System- here, browser is
the customer’s portal to
e-CRM.
 System maintenance and  System maintenance-
modifications- system implementation
implementation is longer and requires less time and cost.
costly.  Customization and
 Customization and personalization-
personalization- different personalized views based on
people require different purchase and preferences are
information but personalized possible.
views for different audience  System focus- system is
are not possible here. designed around the
 System focus- system is customers need. Enterprise
designed around product and wide portals are designed and
job functions. Here, not limited to a single
applications are designed department.
around one department or
business unit.
 Importance of e-CRM:-
 One can gather all information at one place.
 There is no longer an exclusive provider of
information or pricing in the new economy.
 This forces the dealer to compete not only with
known competitors in a given geographical
location, but also with competitors in other areas.
 It helps if the pricing configurations are set to
include the state’s current sales tax.
 The contest and design of the website is always at
the centre of the action.
 E-CRM systems enable customers to do
business with the organization the way the
customer wants-
 Any time, via any channel, in any
language or currency and to make
customers feel that they are dealing with a
single, unified organization that
recognizes them every step of the way.
Online- decision making
 Online-decision making means taking
decisions through information technology.
 Individuals are bounded in their
rationality, “satisfying” rather than
optimizing is the rule in decision- making.
1. Individuals have limited knowledge
2. Information is costly to collect and store
3. Economic behavior requires a trial-and-
error search process.
Steps of on-line decision making
 Awareness
 Search behavior
1. Goal-oriented search behavior
a. Task completion
b. Pre-purchase deliberation
2. Experimental search behavior
a. Build information bank
b. Opinion leadership
c. Recreation
 Task completion
 Search versus purchase
 Use and consumption behavior