2. AMA definition of marketing
 Marketing consists of performance of Business activities
that directs the flow of goods and services from Producer
to Consumer.
 Marketing is the activity, set of institutions, and processes
for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,
and society at large.
 Marketing is an organizational function and set of
processes for creating, communicating and delivering value
to customers by managing customer relationships in ways
that benefit the organization and its stakeholders
2

3. Reasons for Increasing Importance AND
Growth of CRM
 Emergence of service Economy
 Emergence of Market Economy
 Globalisation of Business
 Ageing Population
 Growing Consumer Diversity
 Time Scarcity, Technology Aptitude
 Value Consciousness and Decreasing Loyalty
 Intolerance for Low Services (Low patience of young)
 Availability of Information
3

4. Customer Relationship Management : A Genesis
 Customer Relationship management is the strongest and the most
efficient approach in maintaining and creating relationships with
customers.
 Customer relationship management is not only pure business but also
ideate strong personal bonding within people.
 Development of this type of bonding drives the business to new levels of
success.
 Most of the organizations have dedicated world class tools for
maintaining CRM systems into their workplace.
 Some of the efficient tools used in most of the renowned organization
are Batch Book, Sales force, Buzz stream, Sugar CRM etc.
4

5. CUSTOMER RELATIONSHIP MANAGEMENT
 A Strategy
 A Process
 A Philosophy
 A System or concept
 A Software
 A Buzzword
 A Programming
 A Call Centre Support
 A continuous Activity
5

6. What is CRM
 Customer Relationship Management is all the tools,
technologies and procedures to manage, improve, or
facilitate sales, support and related interactions with
customers, prospects, and business partners
throughout the enterprise.
 Customer Relationship Management is focussing on
the goal of the system is to track, record, store
databases, and then determine the information in a
way that increases customer relations.
6

7. In this unit we will Discuss about:
 Terms of customer value
 Database marketing
 Customer relationship management
7

8. Link between CRM & database
marketing & customer value
 CRM takes the practice of database marketing
principles to increasingly ultimately focusing
relationship with individual customers.
 Customer value is defined as economic value of the
customer relationship to the firms output on the basis
of contribution margin or net profit .
 An important part of CRM is identifying the different
types of customers and then developing specific
strategies for interacting with each customer
8

9. CRM Definition
“CRM is a philosophy and a business strategy supported by a system and a
technology designed to improve human interactions in a business
environment”.
Paul Greenberg, CRM Magazine, October 2003
 “CRM an enterprise wide business strategy designed to optimize
profitability, revenue and customer satisfaction by organizing the
enterprise around customer segments, fostering customer-satisfying
behaviours and linking processes from customers through suppliers.”
Gartner Group
 “CRM is the business strategy that aims to understand,
anticipate, manage and personalize the needs of an
organization’s current and potential
customers” PWC Consulting
9

10. CRM Definition
CRM is the practice of analyzing and utilizing marketing
database and leveraging communication technologies
to determine corporate practices and methods that
will maximize the lifetime value of each customer to
the firm.
CRM is a strategic process of selecting the customers
a firm can most profitably serve and shaping the
interactions between a company and these
customers
10

11. A customer value-based approach
to CRM
 When does it pay to go after a customer loyalty?
 How do you link loyalty to customer profitability?
 How do you compute the future profitability of a
customer?
 How do you measure customer lifetime value?
 How do you optimally allocate marketing resources to
maximize customer value?
 How do you maximize the return on marketing
investments?
11

12. A customer value-based approach
to benefits of CRM
 Decrease costs
 Maximization of revenue
 Improvement in profits and ROI
 Acquisition and retention of profitable customers
 Reactivation of dormant customers
 Customer get best price and services for money
 Customer problems will be solved with no time
 Customer satisfaction increases
 Customer loyalty towards products and companies.
12

13. Defining scope of CRM
CRM aims to look at all aspects that will enable an organization capability
to manage and nurture its 1:1 relationship with its consumers.
Customer Relationship Management, or CRM, is broadly defined as the
business process of understanding, collecting and managing all of the
information in a business environment relating to a customer. The goal
of CRM is to more effectively communicate with customers and
improve customer relationships over time.
James Wong, President, Avidian Technologies.
True customer intimacy – the backbone of a successful rewarding
relationship- requires a deep understanding of consumers in which
products and services are used in the course of customers day to day
lives .
13

14. Customer Values through CRM
 Economic Value
 Functional Value
 Psychological Value
 Information Value
 Association Value
 Relationship Value
 Customer Unique Value
 Experience Value
 Access or Convenience Value
14

15. CRM MODEL
15

16. Three Group Levels of CRM
 Functional level
 Customer front-end level
 Strategic level
16

17. 1. Functional level
CRM process can be practiced along with a strong
technology orientation evolving out of the need for
vendors to position their particular product.
For some of the vendors/buyers functional CRM is
synonymous to technology.
17

18. 2. Customer facing front-end level
 This focuses on the total customer experience
 The goal is to build a single view of the customer
across all contact channels and to distribute customer
intelligence to all customer facing functions
 Marketing to customers throughout their purchasing
lifecycle
18

19. 3. Strategic level
 Its objective is to free the term CRM from any
technology underpinnings and from specific Strategic
customer management techniques
 These definitions describe CRM as a process to
implement customer centricity in the market and
build shareholder value through strategies
19

20. What motivates companies to adopt
CRM strategies?
 Competition :- Differentiation difficult
 Consumer expectations :- Demanding consumers
 Technology: - Cost of CRM technology has dropped
 Diminishing impact of advertising :- With CRM you
can target your message more precisely, hold peoples
attention better and retain customers longer
20

21. Evolution of CRM
21

22. Key components of CRM
 Strategic process
 Selection of Technology
 Interactions
 Customers
 Current and future value of customers
22

23. Customer Life Time Value- CLTV
23

24. ImportanceofCustomerLifetimeValue(CLTV/LTV)
 With the raising cost of acquisition of new customer ,Customer Life
time Value (CLTV) is emerged as powerful metric. This shows the value
and keeping present customers compared to acquiring new customers
in a highly competitive market.
 “Acquiring users with CLTVs greater than the cost per Retaining(CPR)
is not only a strong indicator of effective marketing, it is essential to the
long-term success of an company and a brand.”
 The reason to know the CLTV of your existing players is to predict the
net profit one can expect from the entire future relationship with a new
player.”
24

25. Customer retention
 Customer retention refers to the activities and
actions companies and organizations take to reduce
the number of customer defections. The goal
of customer retention programs is to help companies
retain as many customers as possible, often
through customer loyalty and brand loyalty
initiatives.
25

26.  The customer retention definition in marketing is the
process of engaging existing customers to continue
buying products or services from your business. It’s
different from customer acquisition or lead
generation because you’ve already converted the
customer at least once.
 The best customer retention tactics enable you to form
lasting relationships with consumers who will become
loyal to your brand. They might even spread the word
within their own circles of influence, which can turn
them into brand ambassadors.
26

27. Determinants of Customer Retention
 According to the market evidences following are the
main determinants of customer retention:
1.Delivered quality of products and services vs
customer expectation
2.The Value or worthiness of a particular product or service.:
The worthiness of a particular product or service does not
depend on its own merits. It is only worth and useful if it
meets all customers’ expectation
3. Uniqueness and suitability of products: Most customers
prefer unique and different product. Identical products
normally decrease the probability of selling. .
27

28. Determinants of Customer Retention
4. Loyalty: It is necessarily required for an organization to
interact and communicate with customers on a regular
basis to increase customer loyalty.
5. Easy availability: Some of the products in market are not
easily available. This may be because of poor marketing
strategy or less retail stores.
6. Customer service: Customer service could be considered
as the most important aspect of customer retention.
7.Exit barrier: Organizations which are successful in
creating an exit barrier can obviously retain customers. For
example, by providing rewards and concessions to
continuously buying
28

29. Changes W.R.T Marketplace
 Competition for customers is becoming
intense
 Markets are becoming more fragmented
 Differentiation is becoming more difficult
29

30. Changes WRT Data storage
technology
 Growth in data warehousing applications
 Storage service providers
 Strong intensive consumer applications
30

31. Changes WRT marketing function
 Media dilution and multiplication of channels
 Decreasing marketing efficiency and effectiveness
31

32. Benefits of data-based customer
value approach
 Integrate and consolidate customer information
 Provide consolidation information across all channels
 Manage customer cases
 Personalization of product/service
 Automatically & manually generate new sales
opportunities
 Generate and manage campaigns
 Yield faster and more accurate sales leads, referrals
 Manage all business process
 Give top managers detailed and accurate picture
 Instantly react to changing market environment
32

33. Relationship Hierarchy
Shared value
relationship
Emotional connect
relationship
Satisfaction based
relationship
Transactional relationship
Co-partnering
Experiential
management
Operational
Excellence
Cost
Management
BASIC
PREMIUM
33

34. 9 truths of Relationship marketing
Truth 1 Customers are no longer loyal
Truth 2 Customers do not really want a relationship but
companies do
Truth 3 customers want information
Truth 4 Customers not only want to be thanked for their
patronage, they expect it
Truth 5 Customer control the selling process
Truth 6 the lifetime value of a customer is not relevant
Truth 7 Do not overcomplicate the program
Truth 8 Keep reporting simple and focused on customer
Truth 9 What if? Ask it often and experiment every
chance you get
34

35. Difference between marketing and
CRM
 Unlike marketing CRM views products as processes
 Customers receives value from each exchange between
provider & customer
 Managing relationship based processes
 Second concept in CRM is value creation or co-creation
 Competitive advantage is based ability of the provider to help
customers create value for themselves
 Third relates to providers responsibilities
 A company can build stronger relationship with its customers
only it takes the responsibility for developing relationships
35

36. What is not CRM?
 Piece of software solution
 Sales tactics
 Call center services
 Relationship building by softer attributes of a contact
person
 Empowerment to pass goodwill waivers
 Another buzzword like ERP/BPM
36

37. Types of CRM
1. Proactive Versus Reactive CRM
2. Operational, collaborative and analytical
CRM
37

38. Proactive CRM
 The practice of the company to anticipate and respond
to the customer needs suitable offerings is contrasted
with the practice of simply responding to the customer
stimulus that comes through suggestions or
complaints
38

39. Operational CRM
The customer touchpoints are classified into:
 Face to face touchpoints – Events/stores/service
 Database driven touchpoints – telephone/email/SMS
 Mass media – advertising/PR/website/facebook
39

40. Collaborative CRM
 The mandate of collaborative CRM is to manage
various partners of the company be it business
partners, agents, brokers, OEMs, intermediaries like
distributors, dealers, resellers and retailers
40

41. Analytical CRM
 It involves analyzing large amounts of cross-functional
data using data mining and other methods and
feeding the result back to operational CRM
 It also studies Consumer behavior pattern that helps to
know what products position for cross
selling/upselling
41

42. Customer segmentation
 Customer segmentation based on loyalty attributes
 Another basis of geographic, demographic or
psychographic
 Behavioral segmentation could be looked in terms of
loyalty or frequency
 Segmentation based on choice of communication
channels
42

43. Types of customers and their
behavior styles
 Apostles
 Terrorists/defectors
 Mercenaries
 Hostages
43

44. 44

45. Types of relationships
 Price centered relationships – Best deal
 Need centered relationships – offer personalization of
channels, interfaces and services
 Value Centered relationships – depend on intensive
and extensive collaboration
 Product centered relationships – focus on deliver of
customized products, services, and solutions
45

46. Linking profitability to loyalty
 High profitability and short term customers
(Butterflies)
 Low profitability and short term customer (Strangers)
 Low profitability but long term customers (Barnacles)
 High profitability and long term customers (True
Friends)
46

47. Customer value: Concept
Customer value is the customers perception of what
outcome he expects in a specific use situation with
the help of a product/service offering in order to
accomplish a desired purpose/goal.
47

48. Few fundamental lessons on
customer value
1. Value is customer defined
2. Customers differ in what they seek
3. Value is opaque
4. Value is contextual
5. Value is multidimensional
6. Value is trade-off
7. Value is relative
8. Value is a mindset
48

49. ACURA model
49

50. Types of customer value
 Economic value
 Functional value
 Psychological value
50

51. Types of value based on Barnes
1. Choice based value
2. Employee based value
3. Information value
4. Association value
5. Relationship value
6. Customer unique value
7. Experience value
8. Product for price value
9. Access or convenience value
51

52. Customer Lifetime Value (CLTV)
Dimensions of CLTV:
 The duration of customer lifetime
 The firms share of wallet among its customers
 The firms success in terms of frequency of up & cross
selling
 The firms cots of acquiring, serving & retaining its
customers
52

53. CLTV calculations
CLTV = D( (R-C) + Rf(Ac-Acr))/ 1+r-Ac
T= year
Rf = No of referrals generated by customer
n = Length of customer relationship
Ac = Full acquisition cost
D = Customer Retention rate
Acr = Reduced acquisition cost
R = Revenues earned from customer
C = Cost of servicing customer in year t
r = Discount rate
53

54. CRM Software applications
54

55. 55

56. 56

57. 57

58. 58

59. Modules in CRM
59

60. 1. Sales Force Automation: Sales Force Automation (SFA) is a
software tool that automates each and every task in the function of
Sales. Right from order processing to order tracking, managing
information, contact management, inventory management
(monitoring and control), customer management, sales forecast
analysis and employee performance evaluation.
2. Lead Management: Lead management is the first step of acquiring
the customer. Once this step is completed, leads(a list of strong
potential buyers with some of their details) is passed on to the Sales
department. In this way, lead management process acts as the bridge
between two important departments, namely marketing and sales.
3. Opportunity Management: The tool of Opportunity Management
gives you the pearls of opportunities in sales. Pure leads are just
basic information and that's meaningless unless it is filtered as per
your company requirement. This analyzing and filtering job is done
by this tool. It judges the leads and puts the qualified ones as an
opportunity in the sales pipeline.
60

61. 4. Contact Management: Over the years, sales
management and contact management software have
evolved as close-knit tools. It is vital in this age to have
your contact information fully synchronized with your
sales software
5. Task Management: How do you ensure your sales rep is
following the right path "step by step" in his sales
process? You can simply spell the steps out, beforehand.
Yes, absolutely. And here in this aspect of CRM, Task
Management takes care of exactly this
6. Sales Forecasting In your highly comprehensive and
integrated CRM software, you can easily predict (to a high
degree of accuracy) the future sales of your product.
61

62. 7. Campaign Management: Campaign Management is now
available as part of the CRM solutions and you can launch and
track the success of the campaign right from your CRM
software.
8. Invoice Management: This tool is going to save you from a
future headache. Managing invoices is the most boring and
monotonous part of being in business. With your CRM
software, you can now raise bills and invoices automatically.
9. Social CRM : With the advent of social media, this is a new
feature added to the CRM tool. This tool enables you to
manage your social media interaction with your customers.
62

63. 10. CRM & Sales Reports: You can build numerous reports with
CRM and have the perfect overview of your company's
performance.
11. Mobile Edition: Here the power of CRM gets manifested
with the sheer brilliance of mobility. You can access your CRM
on your mobile, with or without connectivity, wherever you go
and whenever you want. You can configure your mobility
device (Smartphone or tablet) to be able to view the most
important information at all times on your customized
dashboard.
12. Cloud / On-Demand (SaaS): CRM now uses the cloud-
hosted delivery method vis-à-vis the traditional "on-premise
installation". SaaS technology allows hosted delivery or cloud
computing and lets businesses gain a rented "anytime
anywhere" access to their CRM systems.
63

64. Latest Trends in CRM Software
64

65.  Advent of Social CRM - Human-beings are social
animals, and since consumers are also human-beings,
they love interacting with each other. With the
popularity and spread of social media, there is perhaps
not a single day when people haven’t interacted with
someone. According to a recent survey, around 50%
consumers use social media for making purchase
decisions.
 Rapid growth of Cloud CRM - It shouldn't be
surprising to know that nowadays more businesses are
opting for Cloud CRM solutions. Apart from affordable
pricing, these solutions are flexible, updated regularly
and easily maintained.
65

66.  Integration at its peak - A single software package
for all departments makes business tasks smoother
and seamless. Integrating CRM software with all
departments is much time saving and cost efficient.
 CRM Predictions using Analytical Statistics - CRM
software are being coupled with real-time analytical
statistics data for predicting consumer trends and
behavioural moves.
66

67.  Better Customer Experience - Every customer looks
for a human touch, and they find it missing in online
business. This is exactly where brick and mortar
business scores over online business.
 Inclusion of Content Marketing Software into
CRM - Content marketing is no new word in online
business. Building consumer trust and generating
online sales is synonymous with content marketing.
Personalizing dynamic emails and landing pages
through CRM systems is crucial for nurturing leads
and landing more sales.
67