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“Though MBA can be specialized in different streams like
marketing, finance and HR, specialization in CRM sounds
absurd as hardly any university has taken initiative to
design and conduct till date, any course in this context.
The scenario is certainly different in foreign
countries where, realizing the importance, universities like
Baylor University and New York University are already
launching full courses in CRM”.
Importance of this course
Customer Relationship Management Overview of CRM
3. 3
“Indian universities produce every year several thousand MBA
graduates who have a little or no knowledge about CRM.
Surely, some of these business graduates step into the world of
business without adequate knowledge about CRM.
Observing the increasing
relevance of CRM in retail and others sectors, a
student pursuing management education from IILM
Graduate School of Management, will proof himself
as an asset for the organization”.
Importance of this course
Customer Relationship Management Overview of CRM
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4. 4
Course: Customer Relationship Management
1. Overview of CRM
2. Building Customer Relationship Management
3. Economics of CRM
4. Technological Tools for CRM
5. CRM Application in B2B & B2C Market
6. Customer Contact Center
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Learning Objective
‘Conceptual foundations of CRM are covered in this unit,
that begins with an analysis of the nature of customer
relationship in pre-industrial, industrial and the information
era. CRM , is aptly described as an ‘old-new’ concept.
Successful businesses have always endeavored to build
strong and mutually beneficial relationships with their
customers. The benefits of CRM for the firm as well as
customers are also discussed in this unit’.
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Course Contents
• Overview of CRM
• Evolution of CRM
• Benefit of CRM
• Values of Relationship Marketing
• Explosion of CRM both in IT & Retail Marketing
• Enablers for Growth of CRM
• Why Business should adopt CRM
• Building Customer Value & Loyalty
• Presentation: “Refer List of Topics related to CRM”
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Presentation: List of Topics related to CRM
1. Marketing Resource Management
2. Territory Management
3. Opportunity Management
4. Service Order Management
5. Service Contract Management
6. Complaints & Returns
7. Case Management
8. Warranty Management
9. Trade Promotion Management
10. Lead Management
11. Sales intelligence
12. Business intelligence
13. Consumer Relationship System
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Presentation: List of Topics related to CRM
14. Customer Experience
15. Customer Intelligence
16. Data mining
17. Database marketing
18. Employee experience management (EEM)
19. Enterprise Feedback Management (EFM)
20. Enterprise relationship management (ERM)
21. Sales force management system
22. Sales process engineering
23. Support automation
24. Web management system
25. E-CRM
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CRM from the start…
‘Customer satisfaction rates in the US are at an all-time low.
When we talk to people about their life as consumers, we do
not hear praise for their so-called corporate partners. Instead,
we hear about the confusing, stressful, insensitive, and
manipulative marketplace in which they feel trapped and
victimized…Customers cope…They tolerate sales clerks
who hound them with questions…They muddle through the
plethora of products that line grocery store shelves……’
Customer Relationship Management Overview of CRM
Source: ‘Preventing the premature death of relationship marketing', Harvard Business Review
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CRM : Definition
‘The automation of horizontally integrated business
processes involving front office customer contacts points
(marketing, sales, service and support) via multiple,
interconnected delivery channels’.
Customer Relationship Management Overview of CRM
(Extreme Definitions)
Metagroep, 2000
In this description, CRM is positioned in the ‘IT corner'. On the Internet,
technology essentially replaces people, and a human-machine interaction arises.
In telephone and face-to-face contact, IT plays a more supportive role and makes
sure that the supplier’s employees are in a better position to help the customer.
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CRM : Definition
‘ A process that addresses all aspects of identifying
customers, creating customer knowledge, building
customer relationships, and shaping their perceptions of
the organization and its products’.
Customer Relationship Management Overview of CRM
(Standard Definitions)
The role of technology is not even mentioned in this definition. CRM is still
referred to as a process, or rather a sequence of activities; however, this definition
does not specifically state that IT is necessary to perform these activities.
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CRM : Definition
‘ An IT enabled business strategy, the outcomes of which
optimize profitability, revenue and customer satisfaction by
organizing around customer segments, fostering customer-
satisfying behaviors and implementing customer-centric
processes’.
Customer Relationship Management Overview of CRM
(Extreme Definitions)
Gartner Group, 2004
In comparison with the previous definition, CRM is not postulated as a process
but instead as a business strategy. The intension that organizations have in mind
for CRM is made explicit: on the one hand, the goal is to increase revenue and
profit, and on the other, it is to improve customer satisfaction.
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CRM as a Business Strategy
‘ CRM is a business strategy and therefore more than a
functional strategy alone. It affects the organization as a
whole: marketing, IT, service, logistics, finance,
production
& development, HR, management etc. The CRM strategy
will have to provide direction to each department or
employee that maintains contact with customers.’
Customer Relationship Management Overview of CRM
It is reasonable to expect that a business/corporate strategy whose goal
is the development of long-term, mutually profitable customer-supplier
relationships, would replace the customer in a more central position.
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CRM : Definition
‘ A process that addresses all aspects of identifying
customers, creating customer knowledge, building
customer relationships, and shaping their perceptions of
the organization and its products’.
Customer Relationship Management Overview of CRM
(Standard Definitions)
With this definition, one can examine in more detail the reasons why the online
bookstore should implement the ‘interconnected delivery channels’. It is important
here for the communication travelling through the various channels to be recorded
in databases, thus allowing us to identify customers and get to know them.
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CRM : Definition
‘ Is targets the building of an infrastructure which may be
used to develop long-term customer-supplier relationships’.
Customer Relationship Management Overview of CRM
(Standard Definitions)
Regis McKenna
‘ Life time relationship with customers’.
CIM
‘ Attracting, maintaining and enhancing customer
relationships’.
Berry, 1983
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CRM : Definition
• CRM is more than a software,operating system or a
business solutions.
• CRM package includes CRM s/w,strategies,planning and
web-based capabilities which organize,co-ordinate &
manage the relationship with the customers.
• CRM software provides knowledge about
customer,market,current technology,sales & support.
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Relationship Management (RM)
Customer Relationship Management Overview of CRM
AMA definition of marketing, revised in 2004,
“Marketing is an organizational function and a set of
processes for creating, communicating, and delivering
value to customers and for managing customer
relationships in ways that benefit the organization and its
stakeholders”.
The domain that deals with “relationships,” termed
relationship marketing.
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Schools of Thoughts on CRM
Customer Relationship Management Overview of CRM
The initial approaches to CRM can be broadly classified as:
1.The Anglo-Australia Approach
2. The Nordic Approach
3. The North American Approach
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Schools of Thoughts on CRM
Anglo-Australia Approach
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Schools of Thoughts on CRM
Nordic Approach
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Schools of Thoughts on CRM
North American Approach
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In contrast, the initial focus of the NA scholars was on the
relationship between buyer and seller operating within the
context of the OE which facilitated the buyer seller relationship.
(OE)
24. 24
Values of Relationship Marketing
The main goal of marketing department changes from new
customer acquisition to customer retention and extending
the
duration of existing relationships.
Customer Relationship Management Overview of CRM
1. Long-term sustainable relationships, primarily with customers,
but also with suppliers, partners, employees, and others who
might affect the firm’s business.
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Values of Relationship Marketing
Built a multi-billion dollar global business through targeting
existing customers with products and services that fit their
previous buying profile. Company can trace its customers’
buying profiles back over 20 years or more. As a result, they
rarely have to advertise to attract new customers and has
highest circulation of any magazine in the world.
Customer Relationship Management Overview of CRM
1.
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Values of Relationship Marketing
The aim of RM is to create mutual value for everyone in the
relationship. The satisfaction of customers creates a
win-win situation for all.
Customer Relationship Management Overview of CRM
2. The idea that everyone is a winner.
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Values of Relationship Marketing
The big airlines have long had agreements with
each other to offer frequent flyer
incentives. The ‘Flying Blue’ frequent
flyer club includes Aeroflot, Air France,
Aero Mexico and KLM, even though some
of these companies are direct competitors.
Customer Relationship Management Overview of CRM
Even bitter rivals, BA and Virgin, have an agreement to share
spare parts if one of their aircraft breaks down abroad. The
net winner is the customer, but the airlines win as well, as
they are able to maintain their service to the customer.
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Values of Relationship Marketing
Relationship with customers are not just confined to the sales
force; interactions should take place between everyone in the
network including the customer. After all, if there is no
interaction, then how can there be any relationship?
Customer Relationship Management Overview of CRM
3. Recognizing that all parties can be active.
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Values of Relationship Marketing
The company runs local clubs or ‘chapters’, for owners of its bikes,
where members can meet up socially. The chapters offer
additional benefits such as advanced riding courses, competitive
insurance deals & touring services.
Customer Relationship Management Overview of CRM
3.
Chapter members are affectionately known as ‘Hoggers’ (from
Harley Owners Group) and feel a strong sense of belonging
with each other and with the company itself.
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Values of Relationship Marketing
Bureaucratic legal values are characterized by jargon and the
application rules and regulations. In these circumstances
there appears to be a mechanical approach, where customers
feel that they are being treated as statistics rather than
human beings. By contrast , RM makes the customer the
focus of everything that the organization does.
Customer Relationship Management Overview of CRM
4. Service values not ‘bureaucratic legal values.
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Values of Relationship Marketing
Virgin Finance has made a unique
selling point out of its policy of
cutting out complicated financial
jargon and replacing it with
simple explanations that its
customers can easily understand.
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4.
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NO RED-TAPISM
32. 32
Overview of CRM
• Proponents of CRM software claim that it doesn't only allow
more effective ways of managing customer relationships, but
also more customer-centric ways of doing business.
• Executives often cite the need for the proper tools as a barrier to
delivering the experience their customers expect.
• A 2009 study of over 860 corporate executives revealed
only 39% believe that their employees have tools and
authority to solve customer problems.
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Overview of CRM
• It involves the use of technology in attracting new and
profitable customers, while forming tighter bonds with
existing ones.
• CRM includes many aspects which relate directly to
one another:
1. Front office operations — Direct interaction with
customers, e.g. face to face meetings, phone calls, e-
mail, online services etc.
2. Back office operations — Operations that ultimately
affect the activities of the front office (e.g., billing,
maintenance, planning, marketing, advertising,
finance, manufacturing, etc.)
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Overview of CRM
• CRM includes many aspects which relate directly to one
another:
3. Business Relationships — Interaction with other
companies and partners, such as suppliers/vendors and
retail outlets/distributors, industry networks (lobbying
groups, trade associations). This external network
supports front and back office activities.
4. Analysis — Key CRM data can be analyzed in order to
plan target-marketing campaigns, conceive business
strategies, and judge the success of CRM activities
(e.g., market share, number and types of customers,
revenue, profitability).
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• What kind of company can benefit from CRM ?
• Need for CRM & why CRM matters ?
• Why CRM Still fails in most companies ?
• Why Infosys Ltd India acts as a global player in CRM ?
The key goals of CRM are to improve customer retention,
increase sales from existing customers, gain more new
customers and cut the cost of customer acquisition.
Key Questions in CRM
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• It costs six times more to sell to a new customer than to sell to
an existing customer one .
• A typical dissatisfied customer will tell eight to ten people about
his or her experience .
• A company can boost its profit 85% by its annual retention by
only 5% .
• 70% of complaining customers will do business with the
company again if quickly takes care solving the issues .
• The chances of selling a product to a new customer are 15%,
whereas the chances of selling a product to an existing customer
are 50%.
CRM-why it matters ?
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• New sales channel to win new, additional customers
• Improving customer satisfaction
• Better service-adding quality
• Building strategic relationship
• Secure the future of the company
Reason to Implement CRM
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Evolution of CRM
• CRM for some, means 1 to 1 marketing while for some it
means a call centre. Others call database marketing as
CRM or sometimes refer to technological solutions.
• Is CRM really a new concept?
• The industrial revolution changed these relationship-
oriented practices.
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Evolution of CRM
Customer Relationship Management Overview of CRM
Relationship
Orientation
Pre-Industrial Era
(Relationship Centric-
Small Scale)
Industrial Era
(Product Centric
Information Era
(Relationship Centric-
Large Scale)
Low
High
Evolution of Relationship Orientation
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Evolution of CRM
Is CRM really a new concept?
• No, It is not. Merchants and traders have been practising
customer relationship for centuries.
• In many cases, the interactions transcended the
commercial transactions and involved social interactions.
• Even today, this kind of relationship exists between
customers and retailers, craftsmen.
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Evolution of CRM
• The industrial revolution changed these relationship
oriented practices. Business adopted mass production,
communication and mass distribution to achieve economy
of scale.
• Manufacturers started focusing on manufacturing and
efficient operations to cut costs. Intermediaries like
distributors, wholesalers and retailers took on the
responsibilities of warehousing, transportation,
distribution and sale to final customers.
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Evolution of CRM
• The impact of industrial revolution resulted in …. but
brought in many layers between them and the customers.
The resulting gap reduced direct contacts and had a
negative impact on their relationships.
• The post-industrial era (information era) saw the re-
emergence of relationship practices.
Factors for the shift in orientation
1. Rapid advances in technology
2. Intensive competition in most market
3. Growing importance of service sectors
4. Adoption of Total quality Management
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Evolution of CRM
Customer Relationship Management Overview of CRM
Rapid advances in technology
• Advance in ICT helped marketers to come closer to…
• Technology enabled customers undertake some of the
responsibilities normally performed by marketers, like…
• Technology helped to overcome shortcomings of mass
marketing like manufacturing and related operations costs
were reduced through BPR, HR costs reduced through
outsourcing.
Intensive competition in most market
• In competitive market, it is necessary to understand customer’s
needs & wants first then satisfying them. (led to RM
orientation)
• Initiated LTV concept to strengthen customer relationship.
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Evolution of CRM
Customer Relationship Management Overview of CRM
Growing importance of service sectors
• Contributes to over 2/3rd
of GDP of most advanced
economy.
• One of the characteristic of the service industries is the
direct interaction between the marketer and buyer.
Adoption of Total quality Management
• TQM helped companies offer quality products and services
at lowest prices.
• To enable this proposition, company needed to work
closely with their customers, intermediaries as well as
supplier.
• Companies like Intel, Xerox and Toyota formed partnership
relationships with supplier and customers to practice TQM.
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Benefit of CRM
Customer Relationship Management Overview of CRM
• Improve Loyalty
• Relationship based differentiation
• Increase Sales Revenue /Increase Profitability
• Improve internal Productivity
• Enhance executive decision making
• Gain Competitive Advantage (Decrease cost and expenses)
• Deliver Value Added Service to your clients
• Customers are profitable over a period of time
• Marketing benefits of CRM
• Service benefits of CRM
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Benefit of CRM
Customer Relationship Management Overview of CRM
Marketing benefits of CRM
• CRM will gradually reduce organisation’s dependence on
periodic surveys to gather data.
• In many cases, the transaction data is automatically
collected sometimes real time as in the e-commerce
transaction.
Service benefits of CRM
• Most loyal customer take time to complain.
• 70% of complaining customers will do business again
if…..
• Firms are motivated to engage in RM due to superior
economics of customer retention and competitive
advantage of building better relationship.
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Enablers for Growth of CRM
Tremendous growth of interest and investments in CRM
across the globe can be attributed to the following macro-
environmental factors:
1. Global orientation of business
2. Aging population of the economically advanced
economies
3. Emergence of market economy
4. Emergence of service economy
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Enablers for Growth of CRM
1. Global orientation of business
• Different trading blocs and the emergence of WTO helped
create a global orientation for business establishments.
• Liberalization of markets/trade proved to be a far stronger
growth engine. It is easy to enter into foreign markets.
• Firms need stronger customer-orientation to be able to tap
the opportunities in new markets.
.
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Enablers for Growth of CRM
2. Aging population of the economically advanced economies
• Attributed to the combined effects of a slowdown in
birthrate and an increase in life expectancy.
• Creates new opportunities for wellness, financial well being,
safety & security and recreation. It has slowed the markets
for goods/services designed for a younger population.
• Marketers are forced to develop a deep understanding of
their existing customers & meet their ever changing needs.
• Especially the service sector, wants to become ‘ONE STOP
SHOP’ for the customers.
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Enablers for Growth of CRM
3. Emergence of Service Economy
• Advanced countries progressed from agriculture to industrial
and then post-industrial economies. In developing countries,
the growth is led by all three sectors of the economy in
varying propositions.
• It resulted in greater customer orientation as services are
characterized by simultaneity/inseparability.
• In services, one needs to be close to customers to deliver the
service offering. Therefore, it is not surprising that service
businesses like hotels, airlines, banking, financial services,
telecom and retailing were the early adopter of CRM.
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Enablers for Growth of CRM
4. Emergence of Market Economy
• In addition to the shift towards service, there is a global
emergence of the market economy. The power is more to the
market as compared to the controlled economy.
• 1990s witnessed acceleration in the deregulation of many
large industries including banking, telecommunications,
broadcasting & airlines across the world.
• The focus had shifted from capacity creation under control
to the markets. Market-oriented economy necessitated a
customer focus and boosted the importance of CRM.
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Why Business should adopt CRM
Combination of Demand and Supply led factors will accelerate the
adoption of CRM in coming years.
1. Rising Customer Expectations (Increasing affluence in
emerging economics, Greater awareness due to explosive
media growth, Customer diversity)
2. Affordable Technological Advances (Production,
Distribution, Facilitation, Consumption)
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Why Business should adopt CRM
Rising Customer Expectations
• Economic growth in the emerging economies have created
a large middle class (professional with global awareness &
influence)….who is more demanding & quality conscious.
• Information explosion through media has played significant
role in raising customer aspirations and expectations.
• Many of the mass marketing practices fail with customer
who are diverse in their lifestyle, age, income and ethnicity.
This increase in diversity will greatly increase the diversity
in demand and expectations.
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Why Business should adopt CRM
Affordable Technological Advances
Production-
» CAD-CAM and processes like flexible manufacturing
system (FMS) & just-in-time operations (JIT), have
helped improve the quality while reducing the costs
across the supply chain.
Distribution-
» Distribution capabilities of firms have been enhanced due
to computer aided logistics (CALS) & scanner technology
which allows faster response.
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Why Business should adopt CRM
Affordable Technological Advances
Facilitation
» The use of internet to connect enterprise within & outside
with suppliers as well as customers through e-commerce
technologies has resulted in major improvements in
facilitating commercial as well as informational exchange.
Consumption-
» Development of individual login/ID helped in customize the
consumption experience.
» It allows the seller to datamine the transaction, purchase &
usage history at the level of an individual to personalize the
offerings.
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• We need to change the business from the PROFIT
orientation to CUSTOMER CENTRIC.
• Companies that provide services rather than products are
gaining the greatest benefits .
• The new technology will make CRM even more effective
and efficient.
Conclusion
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Question 1
‘The customer is king’
• Discuss whether you agree or disagree with this statement,
giving reasons for your answer.
Question 2
Evaluate the ways in which market research information can
be used for control purposes within your organization.
Assignment:01
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Case Study
Your bank is about to launch a new integrated current
account product that is aimed at providing many customer
services within a single account, including regular current
account services, loan and mortgage facilities and a high
interest savings facility. Mortgage customers will only
pay interest on the net balance owing on the account,
which offers a significant saving to them over the life of
the mortgage.
The product is being marketed as a flexible lifestyle
product, which a customer can use in different ways as
their needs change over the family life cycle.
Assignment:02
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Case Study
(a) Consider how the CRM approach used for the new
product may differ from that used for customers with a
regular current account.
(b) What CRM approach would you recommend for:
– Newly married couples opening a joint account for the first time?
– Married couples with teenage children and a mortgage?
– Couples whose children have left home and have paid off their
mortgage?
Assignment:02
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Why the forign university adopted full time crm..the reason we will disccuss later..bcz of their service economy..india is alos moving towards service economy
Technological tools is like business realted apllication in CRM..CRM in Business (CM, SFA..)
Plethora… overabundance; excess: a plethora of advice , An excess of blood in the circulatory system or in one organ or area. muddle v. , -dled , -dling , -dles . v.tr. To make turbid or muddy. To mix confusedly; jumble. To confuse or befuddle (the mind), as with alcohol
A hound is a type of dog that assists hunters by tracking or chasing the animal being hunted
The cope .. (of a person) Deal effectively with something difficult..customer usullay handle these difficult situation all the time
A cope may be worn by any rank of the clergy, and also by lay ministers in certain circumstances. If worn by a bishop, it is generally accompanied by a mitre. The clasp, which is often highly ornamented, is called a morse.A customer, also called client, buyer, or purchaser, is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services. However, in certain contexts, the term customer also includes by extension anyone who uses or experiences the services of another. A customer may also be a viewer of the product or service that is being sold despite deciding to not buy them.
The word derives from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods of the sort the shop sold there rather than elsewhere, and with whom the shopkeeper had to maintain a relationship to keep his or her "custom," meaning expected purchases in the future.
The slogans "the customer is king" or "the customer is god" or "the customer is always right" indicate the importance of customers to businesses - although the last expression is sometimes used ironically.
However, "customer" also has a more generalised meaning as in customer service and a less commercialised meaning in not-for-profit areas. To avoid unwanted implications in some areas such as government services, community services, and education, the term "customer" is sometimes substituted by words such as "constituent" or "stakeholder". This is done to address concerns that the word "customer" implies a narrowly commercial relationship involving the purchase of products and services. However, some managers in this environment, in which the emphasis is on being helpful to the people one is dealing with rather than on commercial sales, comfortably use the word "customer" to both internal and external customers.
Rteotic.. The art of effective or persuasive speaking or writing.
Language designed to have a persuasive or impressive effect on its audience, but often regarded as lacking in sincerity or meaningful...
We have got a huge suucess on your hands a case study
Automation is the use of control systems (such as numerical control, programmable logic control, and other industrial control systems), in concert with other applications of information technology (such as computer-aided technologies [CAD, CAM, CAx]), to control industrial machinery and processes, reducing the need for human intervention.[1] In the scope of industrialization, automation is a step beyond mechanization. Whereas mechanization provided human operators with machinery to assist them with the muscular requirements of work, automation greatly reduces the need for human sensory and mental requirements as well. Processes and systems can also be automated.
Process or processing typically describes the act of taking something through an established and usually routine set of procedures to convert it from one form to another, as a manufacturing or administrative procedure, such as processing milk into cheese, or processing paperwork to grant a mortgage loan.
In project management a task is an activity that needs to be accomplished within a defined period of time. An assignment is a task under the responsibility of an assignee which should have a start and end date defined. One or more assignments on a task puts the task under execution. Completion of all assignments on a specific task should claim the task as completed. Tasks can be linked together to create dependencies.
fully and clearly expressed or demonstrated; leaving nothing merely implied; unequivocal: explicit instructions; an explicit act of violence
Explicit knowledge is knowledge that has been or can be articulated, codified, and stored in certain media. It can be readily transmitted to others. ...
unquestioning or unreserved; absolute: implicit trust; implicit obedience; implicit confidence. 3. potentially contained (usually fol. by in): to bring ...
AMA American Marketing Association’s definition of marketing,
Relationship marketing was first defined as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions.[citation needed]
As a practice, relationship marketing differs from other forms of marketing in that it recognizes the long term value of customer relationships and extends communication beyond intrusive advertising and sales promotional messages
Values or importance of RM
Anglo australian..those britishers who setteled in australia
Rm has integrated the theory of QM..SM,…
i.E RM is an integrated apporaoch (or integration of )towards all these three components..
Services marketing is a sub field of marketing, which can be split into the two main areas of goods marketing (which includes the marketing of fast moving consumer goods (FMCG) and durables) and the marketing of services. Services marketing typically refers to both business to consumer (B2C) and business to business (B2B) services, and includes marketing of services like telecommunications services, financial services, all types of hospitality services, car rental services, air travel, health care services and professional services.
Customers recognize that quality is an important attribute in products and services. Suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (quality differentiation is also called the quality gap). In the past two decades this quality gap has been greatly reduced between competitive products and services. This is partly due to the contracting (also called outsourcing) of manufacture to countries like India and China, as well internationalization of trade and competition.
CR economics are like market share vs share of customer (page 51)..LTV of customers…profitability versus mkt share
LTV ..customer’s lifetime revenue or profut contribution to the firm
Northic..are the europeans like german..north of europe..alos sweden see the case..nordic approach
When the firm has access to the network it should expand its knowledge about it
by learning of its current activities carried out in the network (Johansson &
Vahlne 1990). The main message in the network view is that cooperation is more
efficient than competition for the firm’s development. If companies trust each
other and develop bonds and communication channels between the different
actors in the network, the resources and activities in the network can be organised
in an efficient way. This creates competitive firms.
Values or importance of RM
Values or importance of RM
Pic hyperlink at the middle..
Even amazon .com is doing the same now a days….
Reader’s Digest has built a multi-billion dollar global business through targeting existing customers with products and services that fit their previous buying profile. If you have predominantly bought books on history or nature, you will be sent offers on similar products. The company can trace its customers’ buying profiles back over 20 years or more. As a result, they rarely have to advertise to attract new customers and the Reader’s Digest magazine has the highest circulation of any magazine in the world.
Hyperlink at the middle for video…
Hog.com
Harley Davidson has built a very strong relationship with its customers. The..
This is particularly common in financial services markets (e.g banks and insurance companies) as well as many non-profit and public sector organizatons such as hospital, tax collection agencies etc
Meaning of Jargon: Confused, unintelligible language; gibberish; hence, an artificial idiom or dialect; cant language; slang.jargon n. Nonsensical, incoherent, or meaningless talk. A hybrid language or dialect; a pidgin. The specialized or technical language of a trade,
The Sausage Factory
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MTV's Now What (USA)The Sausage FactoryGenreComedyCreated byStarringAdam BrodyJohnny LewisKristen RentonOpening themeBrown – SatelliteCountry of originCanadaLanguage(s)EnglishNo. of seasons1No. of episodes13ProductionRunning time25BroadcastOriginal channelThe Comedy Network (Can)MTV (USA)Original runNovember 19, 2001 (Can)April 12, 2002 (USA) – May 29, 2002External linksOfficial website
The term sausage factory may also refer to a legislature.
The Sausage Factory, also known in the United States as MTV's Now What?, was a Canadian/American television situation comedy that followed the lives of four friends in their junior year at West Boulder High School.
The four friends were Zack (Adam Brody, later of The O.C.), trying to win over his unrequited crush Lisa. Ted, the stereotypical rich kid who tries to consummate with his girlfriend, Nancy. J.C., who finds himself constantly approached by middle-aged women, and Gilby (Johnny Lewis), the class clown, who regularly creates trouble.
Produced in 2000 and 2001, it ran for one season. The single-camera series was shot without an audience and included no laugh track.
Originally aired in Canada on The Comedy Network, reruns were later screened on CTV and YTV. In the United Kingdom and Ireland, it airs on Trouble. Sky One previously aired it.
The series won a 2002 Leo Award for Best Director of a music, comedy or variety program or series (John Pozer, episode "Zack's Little Problem") and a nomination for Best Production Design (Grant Pease, episode "Gilby's Millions").
One who argues in support of something; an advocate
An interest group (also advocacy group, lobby group, pressure group or special interest group) is an organization that seeks to influence political decisions. This can be done by explaining the benefits of a policy to the relevant politicians, by making financial contributions or incentives, or a combination of the two. Public and private corporations work with lobbyists to persuade public officials to act or vote according to group members’ interests.[
Conceive meaning formulate or reproduce…Fertilization (also known as conception, fecundation and syngamy), is the fusion of gametes to produce a new organism. In animals, the process involves a sperm fusing with an ovum, which eventually leads to the development of an embryo. Depending on the animal species, the process can occur within the body of the female in internal fertilisation, or outside in the case of external fertilisation
The entire process of development of new individuals is called procreation, the act of species reproduction.
How does CRM works ?
Works by gathering information about customer
Analyzing the information collected
Getting the conclusion from the collected information
Decision making & planning for acquiring new customer & retaining the old customer
……….. for centuries. Their business was built on trust. They could customize the products and all aspects of delivery and payment to suit the requirements of their customers. They paid personal attention to their customers, knew details regarding their customer’s tastes & preferences.
…. resulted in greater efficiencies and lower costs to the manufacturers but brought in many layers between them and the customers. The resulting gap reduced direct contacts and had a negative impact on their relationships.
ICT.. information, communication and production technology ..also ICE age
…closer to their customers.
…performed by marketers, like ordering and product-use related service.
…satisfying them. This has led to relationship orientation.
LTV and also customer share concept (two parameters like need satisfied and customer reached and line is vertical)
In marketing, customer lifetime value (CLV), lifetime customer value (LCV), or lifetime value (LTV) and a new concept of "customer life cycle management" is the present value of the future cash flows attributed to the customer relationship. Use of customer lifetime value as a marketing metric tends to place greater emphasis on customer service and long-term customer satisfaction, rather than on maximizing short-term sales.
Customer lifetime value has intuitive appeal as a marketing concept, because in theory it represents exactly how much each customer is worth in monetary terms, and therefore exactly how much a marketing department should be willing to spend to acquire each customer. In reality, it is difficult to make accurate calculations of customer lifetime value. The specific calculation depends on the nature of the customer relationship. Customer relationships are often divided into two categories. In contractual or retention situations, customers who do not renew are considered "lost for good". Magazine subscriptions and car insurance are examples of customer retention situations. The other category is referred to as customer migrations situations. In customer migration situations, a customer who does not buy (in a given period or from a given catalog) is still considered a customer of the firm because she may very well buy at some point in the future. In customer retention situations, the firm knows when the relationship is over. One of the challenges for firms in customer migration situations is that the firm may not know when the relationship is over (as far as the customer is concerned).
Most models to calculate CLV apply to the contractual or customer retention situation. These models make several simplifying assumptions and often involve the following inputs:
Churn rate
The percentage of customers who end their relationship with a company in a given period. One minus the churn rate is the retention rate. Most models can be written using either churn rate or retention rate. If the model uses only one churn rate, the assumption is that the churn rate is constant across the life of the customer relationship.
Discount rate
The cost of capital used to discount future revenue from a customer. Discounting is an advanced topic that is frequently ignored in customer lifetime value calculations. The current interest rate is sometimes used as a simple (but incorrect) proxy for discount rate.
Retention cost
The amount of money a company has to spend in a given period to retain an existing customer. Retention costs include customer support, billing, promotional incentives, etc.
Period
The unit of time into which a customer relationship is divided for analysis. A year is the most commonly used period. Customer lifetime value is a multi-period calculation, usually stretching 3–7 years into the future. In practice, analysis beyond this point is viewed as too speculative to be reliable. The number of periods used in the calculation is sometimes referred to as the model horizon.
Periodic Revenue
The amount of revenue collected from a customer in the period.
Profit Margin
Profit as a percentage of revenue. Depending on circumstances this may be reflected as a percentage of gross or net profit. For incremental marketing that does not incur any incremental overhead that would be allocated against profit, gross profit margins are acceptable.
[edit] Uses
Lifetime value is typically used to judge the appropriateness of the costs of acquisition of a customer.
For example, if a new customer costs $50 to acquire (CPNC, or Cost Per New Customer), and their lifetime value is $60, then the customer is judged to be profitable, and acquisition of additional similar customers is acceptable. For this reason, the costs involved in the first purchase are typically not included in LTV, but rather, in the Cost Per New Customer calculation.
Business process reengineering (BPR) is, in computer science and management, an approach aiming at improvements by means of elevating efficiency and effectiveness of the business process that exist within and across organizations. The key to BPR is for organizations to look at their business processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business.
Business Process Reengineering Cycle.
Business process reengineering is also known as BPR, Business Process Redesign, Business Transformation, or Business Process Change Management. Reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed, and service. BPR combines a strategy of promoting business innovation with a strategy of making major improvements to business processes so that a company can become a much stronger and more successful competitor in the marketplace.
The main proponents of reengineering were Michael Hammer and James A. Champy. In a series of books including Reengineering the Corporation, Reengineering Management, and The Agenda, they argue that far too much time is wasted passing-on tasks from one department to another. They claim that it is far more efficient to appoint a team who are responsible for all the tasks in the process. In The Agenda they extend the argument to include suppliers, distributors, and other business partners.
Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and
Service sector contributes to over two-third of the GDP…
…. marketer and buyer. This direct interaction creates for better understanding, a better appreciation of needs as well as emotional bonding all of which facilitate relationship building.
…products and services to customer at lowest prices.
Internal productivity by internal marketing
Internal marketing is the task of hiring, training, & motivating able employees who want to serve customers well.
It makes no sense to promise excellent service before the company’s staff is ready to provide it.
Internal marketing must take place at two levels.
At one level, the various marketing functions-sales force, advertising, customer service, product management, marketing research-must work together.
At another level, marketing must embraced by other department; they must also" think customer". Marketing is not a department so much as a company orientation.
…gather data. Collection of data related to buying and consumption behaviour will be an ongoing process.
... to complain. This enables the product/service provider to improve and ensure that such mistake do not recur.
... do business with the company again if quickly takes care solving the issues .
…blocks like NAFTA,ASEAN,GATT and the emergence
…establishments. Increasing international trade became the growth engine for the global economy.
…. new markets while defending themselves in their home markets.
The economically advanced nations are witnessing an aging of their population. In 2000, 12.6 % of US population was 65 years of age.
Comparative figure for sweeden and japan were 17.2% and 17 %. This trend is visible in most parts of the europe.
The 2001 census has shown that the elderly population of India accounted for 77 million. While the elderly constituted only 24 million in 1961, it increased to 43 million in 1981 and to 57 million in 1991.The proportion of elderly persons in the population of India rose from 5.63 per cent
in 1961 to 6.58 per cent in 1991 (IrudayaRajan, Mishra and Sarma, 1999) and to 7.5 per cent in 2001.
.. Aging of population has been attributed to the combined ….
While aging population creates new opportunities for wellness, financial well being, safety & security and …
….slowed the markets for goods/services designed for a younger population.Therefore in these markets, growth is being achieved by increasing the ‘SHARE OF WALLET’ and not through ‘growth of markets’.
…. post-industrial economies. The shift from manufacturing to services was spread over a few decades of last century. However, in dev
The growing importance of services resulted in greater customer………
simultaneity/inseparability implies that production and consumption of service are inseperable.
In the US, the service sector accounts for over 75% of GDP/GNP. In western europe , canada & japan it varies between 60 to 70%.
In 2001, the service sector contributed to 48% in India, 54% in Philippines and 33% in China.
There are five characteristics- Five I’s of Services
Intangibility “u can’t touch this”
Inconsistency “services are not always delivered the same way”
Inseparability “Production (or performing the service) and Consumption (using the service) - happens at the same time”
Inventory Less “cannot be put in inventory or stored for later use”
Involvement-- Customer participation is essential in services. Ability, skill and performance of customers are needed for the production quality
of service. Customization is the key strategy in services.
driving the differences between goods and services marketing.
…across the world. As a result, market-oriented firms operating in intensely competitive markets now take decisions that was once controlled by the government.
Economic System Classification
“ Another way of classifying countries is by their
economic system. Keeping this in view, countries are
classified as market economies, command economies
and mixed economies”.
Market Economies
In countries where individual goals are uppermost over collective goals, market economies do find their place.
Also called Capitalism, all productive functions are privately owned. Production of goods/services is not planned by individuals. Rather production is determined by the interaction of supply and demand forces.
Analyze this situation at Russia
“ Before prices were freed in Russia, people used to say that if they ever saw a line, they just stood in it. When they got to the front of the line, they bought whatever was being sold. Even if they didn’t need the item, they figured that someone in their extended family did, so they just bought it. When the supply ran out, there wouldn’t be any more left, no matter what price you were willing to pay”.
Whether to produce more or less depends on the price factor.
If demand for a product exceeds its supply, producer tends to rise promoting producers to produce more and vice-versa.
In market economy consumers are sovereign. Consumers decide what the producers should produce and supply.
E.g. The US, Canada, UK, Hong Kong
Market Economies (Merits & Demerits)
Each economic system has its own strengths and weaknesses. Capitalism encourages individual initiatives, allows market forces to have free play, promotes a competitive spirit, and directs the scare resources to most profitable uses.
The weakness of market economy stems from the fact that it results in gross inequities of income, exploitation of the poor by the rich.
Capitalism tends to have devastating effect on environment. People in capitalist societies earn more and consequently indulge in excessive and wasteful expenditure on consumer durables and luxuries.
Command Economies
Also called socialism, in a command economy planning is must.
Decision relating to all economic activities- what to produce, how to price- are determined by economy, a central government plan.
In fact, in a pure command economy the tools of production are organized, managed and owned by the government, with the benefits accruing to public.
Consistent with collective ideology, the objective of a command economy is for government to own and run business for the good of society.
Historically, command economies were found in communist countries where collective goals were given priority over individual goals. Since the demise of Communism in the late 1980s, the number of command economy nations has fallen drastically.
E.g. Vietnam & North Korea
Mixed Economies
This falls midway between a market economy and a command economy. Largely followed in France, India, Italy and Sweden, mixed economies admit existence of private sector along with government ownership.
The economic set-up under this philosophy is split into three parts:
Sector in which both production & distribution are entirely managed & controlled by the state
Sector in which the state & private enterprise jointly participate in production as well as in distribution
Sector in which the private enterprise has complete access subject only to the general control and regulation of the state
Mainly demand & supply factor led to adoption of CRM.
Combination of Demand (Rising customer expectations will force businesses to adopt CRM) and Supply (Technological advances & declining costs of IT and communication technology will reduce the barriers to adoption of technology led CRM initiatives) led actors will accelerate the adoption of CRM in coming years.
….who is more demanding & quality conscious.
They can afford and are willing to pay for better and customized services. Many of them are nuclear families and have double income with the spouses employed. This has resulted in activities like cooking, cleaning and childcare being outsourced to service providers.
The information explosion through media has played a significant role in raising customer aspirations as well as expectations. The total no of TV homes has remained stable at about 100 million in the US in the last decade while it has exploded in the developing countries. China 341 million, India 80 million and Brazil 44 million, have witnesses some of the fastest penetration growth of TV in homes in the last decade.
.. The Increasingly customer prefer choices, tailored to their needs and are personalized in nature. Many of the mass marketing …
Increasingly customer prefer choices, tailored to their needs and are personalized in nature. Many of the mass marketing practices fail with customer who are diverse in their lifestyle, age, income and ethnicity.In the US, ethnic pluralism is increasing as some minority groups likw Hispanic, Afro-American and Asian are growing rapidly. 29% of workforce in the US are minorities. One thrid of children in The US in 1995 were Asians, african American or Hispanic.
Dell.com allows buyers to configure the computer of their choice by co-opting them as co-producers during the design state.