UnitIV Customer relationship management CRM CRM is a

Unit-IV Customer relationship management (CRM) : -- CRM is a widely implemented strategy for managing a company’s interactions with customers, clients and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients back into the fold, and reduce the costs of marketing and client service. Customer relationship management describes a company -wide business strategy including customer-interface departments as well as other departments. Measuring and valuing customer relationships is critical to implementing this strategy.

Types of CRM--: (1)Sales force automation : - Sales force automation (SFA) involves using software to streamline all phases of the sales process, minimizing the time that sales representatives need to spend on each phase. This allows a business to use fewer sales representatives to manage their clients. At the core of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective client, from initial contact to final disposition. Many SFA applications also include insights into opportunities, territories, sales forecasts and workflow automation. n

(2) Marketing : -CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. A key marketing capability is tracking and measuring multichannel campaigns, including email, search, social media, telephone and direct mail. Metrics monitored include clicks, responses, leads, deals, and revenue. Alternatively, Prospect Relationship Management (PRM) solutions offer to track customer behaviour and nurture them from first contact to sale, often cutting out the active sales process altogether. In a web-focused marketing CRM solution, organizations create and track specific web activities that help develop the client relationship. These activities may include such activities as free downloads, online video content, and online web presentations.

(3) Customer service and support : - CRM software provides a business with the ability to create, assign and manage requests made by customers. An example would be Call Center software which helps to direct a customer to the agent who can best help them with their current problem. Recognizing that this type of service is an important factor in attracting and retaining customers, organizations are increasingly turning to technology to help them improve their clients’ experience while aiming to increase efficiency and minimize costs. CRM software can also be used to identify and reward loyal customers which in turn will help customer retention. Even so, a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems.

(4)Appointment : Creating and scheduling appointments with customers is a central activity of most customer oriented businesses. Sales, customer support, and service personnel regularly spend a portion of their time getting in touch with customers and prospects through a variety of means to agree on a time and place for meeting for a sales conversation or to deliver customer service. Appointment CRM is a relatively new CRM platform category in which an automated system is used to offer a suite of suitable appointment times to a customer via e-mail or through a web site. An automated process is used to schedule and confirm the appointment, and place it on the appropriate person's calendar. Appointment CRM systems can be an origination point for a sales lead and are generally integrated with sales and marketing CRM systems to capture and store the interaction.

(5)Analytics : - Relevant analytics capabilities are often interwoven into applications for sales, marketing, and service. These features can be complemented and augmented with links to separate, purpose-built applications for analytics and business intelligence. Sales analytics let companies monitor and understand client actions and preferences, through sales forecasting and data quality. n Marketing applications generally come with predictive analytics to improve segmentation and targeting, and features for measuring the effectiveness of online, offline, and search marketing campaigns. Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. By evaluating “buy signals, ” marketers can see which prospects are most likely to transact and also identify those who are bogged down in a sales process and need assistance. Marketing and finance personnel also use analytics to assess the value of multifaceted programs as a whole.

(6) Integrated/collaborative : - Departments within enterprises — especially large enterprises — tend to function with little collaboration. More recently, the development and adoption of these tools and services have fostered greater fluidity and cooperation among sales, service, and marketing. This finds expression in the concept of collaborative systems that use technology to build bridges between departments. For example, feedback from a technical support center can enlighten marketers about specific services and product features clients are asking for. Reps, in their turn, want to be able to pursue these opportunities without the burden of reentering records and contact data into a separate SFA system.

Benefits of CRM : -- A CRM system may be chosen because it is thought to provide the following advantages: (1) Shared or distributed data As companies realize that customer relationships are happening on many levels (not just through customer service or a web presence), they start to understand the need for sharing all available data throughout the organization. A CRM system is an enabler for making informed decisions and follow-up, on all the different levels. (2) Cost reduction A strong point in Customer Relationship Management is that it is making the customer a partner in your business, not just a subject. As customers are doing their own order entry, and are empowered to find the info they need to come to a buy decision, less order entry and customer support staff is needed. v

(3) Better Customer Service: - All data concerning interactions with customers is centralized. The customer service department can greatly benefit from this, because they have all the information they need at their fingertips. No need to guess, no need to ask the customer for the n-th time. And through the use of push-technology, customer service reps can lead the customer towards the information they need. And, most of the time, the customer can do this on their own, as the CRM system (remember, the 3 P's) is more and more able to anticipate the need of the customer. The customer experience is greatly enhanced. (4) Decision support : - CRM system can help to take decision for future and forecast about customer requirement.

(5) Increased Customer Satisfaction : - The customer feels that he is more "part of the team" instead of just a subject for sales and marketing (the proverbial number), customer service is better, his needs are anticipated. There is no doubt that customer satisfaction will go up. If the products sold exceed the customers expectation, of course, no CRM system can help you with shoddy products. In my opinion, the term satisfaction is a contaminated. Many companies think that if customers are satisfied that this is a good predictor for repeat business. However, this is not the case. Only delighted customers have a great level of loyalty. (6) Better Customer Loyalty: - If a CRM system can help to attract customers, this will increase customer loyalty, and they will keep coming back to buy again and again, hence customer retention.

v 1. 2. 3. Issues in CRM Implementation : -Customer Centric Strategy : -- A customer centric strategy should be established first on the corporate level. This strategy must be based on and consistent with the overall corporate strategy and must be communicated across the whole organization. Commitments from people : -- The more commitments from people across the corporation to the transformation of business strategy, the more likely the CRM implementation will succeed. Employees should be willing to learn the necessary technological skills. Improved or redesigned processes : -- It is inherently difficult to identify the processes that need to be involved and frequently redesigned when implementing CRM.

4. Software technology : -- CRM software can record business transactions, create operations focused databases, facilitate data warehousing and data mining, and provide decision making support and marketing campaign management tools. Companies should select the appropriate CRM packages to meet specific corporate CRM needs as well as to enable integration with legacy enterprise applications such as the ERP system. 5. Infrastructure : -- Effective CRM implementation requires suitable corporate infrastructure. This infrastructure includes network setup, storage and data backup, computing platforms and web servers. However, only effective corporate infrastructure integration can provide solid support for the CRM implementation.

Classifications of CRM applications : -(1) Customer Facing applications: -- Customer facing applications are those where customers interact with a company. The primary application is Web based call centers, otherwise known as customer interaction centers. v q Customer Interaction Centers: -- A customer interaction center is a comprehensive customer service entity in which EC vendors take care of customer service issues communicated through various contact channels. It allows customers to communicate and interact with a company in whatever way they choose. Providing well-trained customer service representatives who have access to data such as customer history, purchases and previous contacts is one way to improve customer service.

(2) Customer Touching applications: -- Customer touching applications are those where customers use computer programs rather than interacting with people. (a) Personalized Web Pages : -- Many companies provide customers with tools to create their own individual web pages (Eg. My Yahoo). Companies can efficiently deliver customized information such as product information and warranty information when the customer logs on to the personalized page. Not only can a customer pull information from the vendors site, but the vendor can also push information to the consumer. Web pages can be used to record customer purchases and preferences.

(b) Campaign Management : -campaign management applications automate marketing campaign activities such as online ad planning and analysis. They present offers to targeted leads, prospects and customers on demand, on a schedule, or in response to business events through direct mail, e-mail, a contact center, field sales, and web touch points. Ideally this applications should be able to record responses to offers.

(c) Web Self-Service: -- The web environment provides an opportunity for customers to serve themselves. Known as web self-service, this strategy provides tools for users to execute activities previously done by corporate customer service personnel. Personalized web pages for e. g are one tool that may support Web self-service. Self-Service applications can be used with customers and with employees, suppliers and any other business partners. Ex. Today customer go to fedex. com, insert their airbill number, and view the status of their package shipment. (d) Self Tracking : -- Self tracking refers to systems, like that of Fed. Ex, where customers can find the status of an order or service in real time. Ex. Some auto manufacturers allow customers to track the progress of the production of a customized car.

(3) Customer Centric Applications : -- customer centric applications support customer data collection, processing and analysis. q q Data reports : -- Data reporting presents raw or processed CRM-related information, which managers and analysts can view and analyze. Reports provide a range of tabular and graphical presentation formats. Analyst can analyze that data. Data Warehouse : -- Medium and large corporations organize and store data in a central repository called a data warehouse so that it will be easy to analyzer later on, when needed.

(4) Online Networking and other applications : -Online networking refers to methods that provide the opportunity to build personal relationships with a wide range of people in business. Online networking and other applications support communication and collaboration among customers, business partners, and company employees. These include chat rooms, Usenet groups and discussion lists.

v One to One Marketing : -One of the greatest benefits of EC is its ability to match products and services with individual consumers. Such a match is a part of one-to-one marketing, which treats each customer in a unique way to fit marketing and advertising with the customers needs.

(A) Personalization : -- Personalization refers to the matching of services, products, and advertising content to individuals. The matching process is based on what a company knows about the individual user. This knowledge is usually referred to as a user profile. The user profile defines customer preference, behaviors and demographics. Profiles can be generated in several ways. The major strategies used to compile user profiles include the following:

(1) Solicit information directly from the user : -This is usually done by asking the user to fill in a questionnaire or by conducting an interview with the user. (2) Observe what people are doing online : -- A common way to observe what people are doing online is through use of a cookie. – a data file that is stored on the users hard drive, frequently without disclosure or the users consent. Sent by a web server over the Internet, the information stored will surface when the users browser again accesses the specific web server and the cookie will collect information about the users activities at the site.

(3) Build from previous purchase patterns : -For Ex. Amazon. com builds customer profiles to recommend books and CDs based on what customers purchased before rather than asking customers, using cookies or doing market research. (4) Perform marketing research : -- Firms can research the market using tools such as data mining. Means select data from large database.

(B) Collaborative Filtering: -Once a company knows a consumers preferences, it would be useful if the company could predict, without asking, what other products or services this consumer might enjoy. One way to do this is through collaborative filtering, which uses customer data to infer customer interest in other products or services. The following are some variations of collaborative filtering.

(1) Rule based filtering : -- A company asks consumers a series of yes/no or multiple choice questions. The questions may range from personal information to the specific information the customer is looking for on a specific web site. Certain behavioral patterns are predicted using the collected information. From this information the collaborative filtering system derives behavioral and demographic rules such as, “ If customer age is greater than 35, and customer income is above 1, 000, show Jeep Cherokee Advertise. Otherwise show Mazda Protégé Advertise”.

(2) Content based filtering: -- With this technique, vendors ask users to specify certain favorite products. Based on these user preferences, the vendors system will recommend additional products to the user. This technique is fairly complex because mapping among different product categories must be completed in advance. (3) Activity based filtering : -- Filtering rules can also be built by watching the users activities on the Web.

(C) Customer Loyalty : -- One of the major objectives of one-to- one marketing is to increase customer loyalty. Customer loyalty is the degree to which a customer will stay with a specific vendor or brand. Customer loyalty is expected to produce more sales and increased profits over time. Also it costs a company between five to eight times more to acquire a new customer than to keep an existing one. Increased customer loyalty can bring cost savings to a company in various ways like lower marketing costs, lower transaction costs, lower customer turnover expenses, lower failure costs such as warranty claims and so on. Customer loyalty also strengthens a company’s market position because loyal customers are kept away from the competition. The downward migrates in terms of loyalty have one of three reasons for spending less is like: Their life style has changed, so they have developed new needs that the company is not meeting, they continually reassess their options and have found a better one.

(D) Trust : -- Trust is the psychological status of involved parties who are willing to pursue further interactions to achieve a planned goal. When people trust each other they have confidence that as transactions partners they will keep their promises. However both parties in a transaction assume some risk. In the marketplace, sellers and buyers do not meet face to face. The buyer can see a picture of the product but not the product itself. Promises of quality and delivery can be easily made but will they be kept. To deal with these issues EC vendors need to establish high levels of trust with current and potential customers.

v Security Schemes : --