The slides are created for 'Management Information System' subject of SEIT under University of Pune, INDIA. Subject Teacher: Mr. Tushar B Kute, Sandip Institute of Technology and Research Centre, Nashik.

1. Management information system Third Year Information Technology Part 13 Customer Relationship Management Tushar B Kute, Sandip Institute of Technology and Research Centre, Nashik http://www.tusharkute.com

2. CRM Of the people, by the people, and for the people.

3. Three Eras in the History of Marketing Production Era “A good product will sell itself.” Sales Era “Creative advertising and selling will overcome consumer resistance and convince them to buy.” Marketing Era “The consumer is king! Find a need and fill it.”

4. Profitability of Long-Life Customers According to a study conducted by the American Management Association, 65 percent of the average company’s business comes from its present, satisfied customers Costs a company 6x’s more to sell a product to a new customer than it does to an existing one

5. Profitability of Long-Life Customers A business that each day for one year loses one customer who customarily spends $50/week would suffer a sales decline of $1,000,000 the next year Reichheldfound that companies could boost profits by 100 percent by retaining just 5 percent more of their customers.

6. Relationship Marketing Relationship marketing involves long-term, value-added relationships developed over time with customers and suppliers. Relationship marketing recognizes the critical importance of internal marketing to the success of external marketing plans.

7. Relationship Marketing Morgan and Hunt (1994) proposed the following definition of relationship marketing: Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relationship exchanges

8. Customer Relationship Management “Process of creating and maintaining relationships with business customers or consumers” “A holistic process of identifying, attracting, differentiating, and retaining customers” “Integrating the firm’s value chain to create enhanced customer value at every step” “An integrated cross-functional focus on improving customer retention and profitability for the company.” “A view of the customer that asserts that he or she is a valuable asset to be managed.” –S. Thomas Foster. Deciding that “you want lifetime clients.” -Richard Buckingham.

9. Customer Relationship Management Bottom-line: The use of information-enabled systems for enhancing individual customer relationships to ensure long-term customer loyalty and retention

10. Crm configuration Front office operations Meetings, phone calls, emails, online services. Back office operations Billing, maintenance, planning, marketing, advertising, finance, manufacturing. Business relationships Interaction with companies and partners, suppliers, vendors and retail outlets, distributors.

11. Complaint Resolution Feedback Guarantees Corrective Action Four tools

12. Complaint resolution Three types of complaints: Regulatory, Employee, Customer Compensation Ease of Resolution

13. feedback Customer Data Customer Behavior Data-gathering Analyzing Data

14. guarantees Customer Rights Guarantee Design: Unconditional Meaningful Communicable Painless to invoke

15. The way a firm reacts to a problem so that the problem never reoccurs. Corrective action

16. Barne’s 4 r’s

17. A low-cost way to increase revenue. Retention is cheaper than acquisition. Must be voluntary. Must lead to long-term relationships. Customer retention

18. Relationships Attempting to know the customer. Commitment and Communication “Clients should call you only once. After that, you should proactively call them.” –Richard Buckingham.

19. Powerful tool that results from customer satisfaction or dissatisfaction. “Referral clients are already sold, before they even call you.” –Richard Buckingham referrals

20. Empower employees so that they may deal with mistakes as they occur. recovery

21. CUSTOMER RELATIONSHIP MANAGEMENT Time line of CRM evolution First Generation(before 1990)started with such functions like maintaining prospects data, generating leads, creating sales quotations & placing sales orders and other functions like after sales help desks, call centers etc Second Generation (1990-1996) consolidation of various activities into pre-sales through SFA transactions and post sales through CSS. Not much of an integration with back office operations Third Generation( After 2002) integration of the customer facing front end systems with the back end systems as well as with partners& suppliers helped by the growth of the Internet technology.

22. Types of CRM Operational CRM automation of Business processes involving customers. e.g. Sales Force Automation, Customer service automation, Customer Touchpoints- all sources by which the customers interact with the company Analytical CRM is the synthesis & interpretation of operational Data to identify opportunities, optimize customer interactions and manage business performance. e.g. Data warehousing and Data marts Collaborative CRM provide interactions between customers, staff and business partners through web technologies. e.g. interactive voice technology, computer telephony and web conferencing.

23. CHANGES WITH RESPECT TO CUSTOMERS Growing Customer Diversity Time Scarcity Value Consciousness & intolerance for Low Service Level Information Availability Decrease in Loyalty CHANGES WITH RESPECT TO MARKETPLACE Growing Competition CHANGES WITH RESPECT TO DATA STORAGE TECH. IT and ITES CHANGES WITH RESPECT TO MARKETING FUNCTION Media Dilution & Multiplication Decrease in Marketing Efficiency WHY IS CRM IMPORTANT TODAY?

24. CRM Objectives Lifetime Value (LTV) Refers to the net present value of the potential revenue stream for any particular customer over a number of years. Starts with current purchase activity then extrapolates to include potential additions from cross-selling, upgrades, total ownership, etc. Customer Ownership Attempts to “own” the lionshare of customer spending and/or “share of mind” in a particular product category Building brand equity, maintaining vigilant customer contact, keeping current with the market trends is critical 5% points increase in customer retention=20-125% increase in profit

25. Is CRM New? No! Simply an extension of relationship marketing Builds on customer service and satisfaction concepts Just the latest buzzword for creating customer orientation Bottom-line is still the same Yes! A shift in corporate philosophy concerning the approach to value delivery Customer-centric approach to value chain New and technology-enhanced processes Focus is not just on bottom-line, but on top-line Goal is to create satisfying experiences across all customer contact points

26. Approaches to crm Data driven approach. Process driven approach.

27. Data driven approach It relies on the past data and information and customer intelligence for designing CRM strategies. Customer intelligence Customer Data Analysis and Processing Evolve CRM Strategies Implement Strategies Evaluate and Modify

28. process driven approach The CRM solution senses the behavior of the customer and act proactively to deliver the service. Initiation Of service Transition to service Preservice Service Post- Service Customer Knowledge Database Evaluate KMS

29. CRM-Related Terms eCRM CRM that is Web-based ECRM Enterprise CRM PRM Partner relationship management cCRM Collaborative CRM

30. CRM-Related Terms SRM Supplier relationship management mCRM Mobile CRM xCRM More hybrids to com

31. “You can learn a lot about our motorcycle company by understanding our customers. By valuing and responding to our customers, we have become the leader in the heavyweight motorcycle market.” –Harley-Davidson website “The customers’ first choice in casual dining.” –Chili’s Vision quotes

32. references WamanJawadekar, "Management Information Systems” , 4th Edition, Tata McGraw-Hill Publishing Company Limited. Tushar B Kute, Sandip Institute of Technology and Research Centre, Nashik http://www.tusharkute.com