1. STRATEGIC APPLICATION OF IT -
Customer relationship
management
Seema Agarwal

2. History of CRM
B&S RM CIMS CRM e-CRM
Time line
Late 80’s Early Mid 90’s 2002 - Future
90’s
B&S – Buying & Selling
RM – Relationship Marketing
CIMS – Customer Information Management Systems
CRM – Customer Relationship Management
e-CRM- A subset of CRM that focuses on enabling customer
interactions via e-channels (The web, email and wireless)

3. CONCEPT & APPLICATION OF C.R.M. IN
BUSINESS
• C.R.M: THE STRATEGIC IMPERATIVE
 STRATEGIC USE OF INFORMATION
TECHNOLOGY
- Can help a business cut cost, differentiate, innovate
products & services, promote growth, develop
alliance, lock-in / retain customers, create switching
cost, raise barrier to entry, develop new customers
- Leading SW players like Siebel Systems, Oracle,
SAP, PeopleSoft etc

4.  BUILDING CUSTOMER FOCUSED BUSINESS with
use of internet, intranet & extranet, e-commerce
websites & services to keep track of customers
preference to provide services tailored to individual
needs of customers.
EX: HILTON HOTEL CASE. OnQ / MITSUBISHI MOTOR SALES
 C.R.M. is an inherent element of business strategy in
the new millennium. Firms in services, goods &
consumer industry as well as business market (B2B)
are using CRM tools.
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5. Hilton OnQ
• Hilton OnQ –IT Infrastructure created by the Hilton gave their firm
a nervous system.
• CRM – CRM was an addition made to the OnQ infrastructure. It
utilized technology to give Hilton a solidified relationship with
its premier customers.
• Using Call Centers to gather more information about their
customers during the reservation process.
• “OnQ Reservation allows the agents to access callers’ personal
dossiers and update their preferences. This information shortens
the time on the phone and it enables better cross-selling.”
• Best Guest Arrival Report.
• The Satisfaction and Loyalty Tracking (SALT)

6. CRM Benefits to Mitsubishi
The Beginning
• Mitsubishi started CRM in 1999 by condensing their 18 service lines and call
centers to one using “call center software” by Siebel systems.
• The next year a new customer-centric database was consolidated in-house,
to power the call center.
• About half of customer calls were handled by an interactive voice response
unit rather than a person!
• Smart Scripts Workflow software from Siebel was also implemented in March
2001.
• Happier customers – satisfaction rate rose 8%
• Career growth and higher pay for call center employees.
• Greatly reduced call center turnover (20% to about 7%).
• 66% reduction in cost per call.
• Able to handle 38% more calls.

7. C.R.M. IS ABOUT
• “is a business strategy with outcomes
– that optimise profitability, revenue and customer satisfaction
– by organizing around customer segments,
– fostering customer-satisfying behaviors and
– implementing customer-centric processes.”
• “is a strategy
 used to learn more about customers' needs and behaviors
in order to develop stronger relationships with them.”
 Acquiring & Retaining customers
 Improving customer Loyalty.
 Gaining customer insight.
 Implementing customer focused strategies.

8. WHAT IS C.R.M.?
– C.R.M is a business strategy that enables
organizations
 to get closer with their customers,
 to better serve their needs,
 improve customer service,
 enhance customer satisfaction
 maximize customer loyalty & retention.
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9. CRM Strategies
Customer Acquisition
• Gain the greatest number of new “Best” customers as early in their
“lifespan” as possible.
Customer Retention
• Retain and expand your business and relationships with your
customers through up-selling, cross-selling and servicing.
Customer Loyalty
• Offer programs to ensure that your customers happily buy what you
offer only from you.
Customer Evangelism
• Enable loyal customers to become a volunteer sales force.
Cost Reduction
• Reduce costs related to marketing, sales, customer service and
support.
Improve Productivity

10. WHY C.R.M. IS IMPORTANT
• Every business has to focus on the needs of
the customer & C.R.M. Is the array of
processes that help a company to
understand the preference or dislikes of
individual customers in order to build lasting
relationships.
– C.R.M. Solutions help to safely store
volumes of customer data in an organized
manner for easy to use & access.
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11. – By analyzing this data business person
can determine individual customer
behavior, analyze preference & provide
one-to-one services to maximize
satisfaction.
– Such a customer centric approach
helps to augment customer loyalty &
increase their value to the company.
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12. Underpinning Theory
• Customers have many points of contact with an
organisation
• Retaining customers is far most cost effective
than recruiting new ones
• Some customers are more profitable than others
– The “80/20” rule
– For most firms, 80 percent of profit comes from 20
percent of customers
• Use of Technology

13. Why CRM is a Customer and
Competitive Necessity
• It typically costs 5-10 times as much to acquire a new customer as it
does to retain an existing one.
• “Some companies can boost profits by almost 100% by retaining just
5% more of their customers.” Harvard Business Review (Reicheld &
Sasser)
• A recent McKinsey study showed that the average new customer
spends $24.50 at a given web site in the first 3 months as a shopper.
The average repeat customer spends $52.50 every 3 months.
• Most companies lose 50% of their customers in 5 years (Harvard
University)
• On average only 15% of a site’s customers consider themselves loyal
to it. The loyalty rating among people who had experienced a problem
was only 6%. Customers who had not experienced problems indicated
a customer loyalty rating of 19%. The loyalty rating among customers
who had experienced problems but were satisfied with the way they
were handled: 21%. (Digital Idea)
• The web customer is ‘only 1 click away from your competition’.

14. An example
The Elements of CRM
Sales Customer service/call Marketing
force center management automation
automation
Call center telephone sales Call Centers Campaign
Managing aspects management
E-commerce Of customer contact
Field sales
Web-based Content
Retail self service management
Data analysis
Third-party brokers, Field services
And business
Distributors, agents and dispatch
Intelligence tools
Data warehouse and data cleaning tools
C.R.M. TYPICALLY INTEGRATES THREE CORE CUSTOMER RELATED
ACTIVITIES:- (1) SALES (2) MARKETING (3) CUSTOMER SERVICE.
*Source: Computerworld

15. C.R.M. TOOLS FOR SALES
– CONTRACT MANAGEMENT / SALES /
ADMINISTRATION / CUSTOMER
PREFERENCE MGMT./LEAD MGMT. & ANY
OTHER TOOLS SUPPORTING THE SELLING
PROCESS.
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16. C.R.M. TOOLS FOR MARKETING
– BUSINESS USERS TO CREATE & MANAGE
MARKETING CAMPAIGNS & TO TRACK
MARKETING CAMPAIGN SUCCESS RATES
ETC.
– DATA ANALYSIS AND BUSINESS
INTELLIGENCE TOOLS
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17. C.R.M. TOOLS FOR CUSTOMER SERVICE
– ALLOW A BUSINESS TO CREATE A
REPOSITORY OF CUSTOMER SERVICE,
ENQUIRIES TO ANALYZE CUSTOMER
SATISFACTION & TO CREATE A KNOWLEDGE
BASE OF ESTABLISHED CUSTOMER SERVICE
PRACTICES.
 VALUE OF C.R.M.: is measured by its ability to
improve customer service & relationship,
streamlining the business processes by
creating a comprehensive system to manage &
analyze data. 17

18. – C.R.M. Solutions can yield immediate
productivity benefits by consolidating customer
records
– C.R.M. Tools also provide business users with
reporting & analysis tools, allowing easy creation
of reports, forecasts & other key performance
functions.
 Building customer relationship
 Relationship building as a process:
– C.R.M. is built on an iterative process of
learning & customization 18

19. – Companies interact with customers & learn about
who they are what they want, how much they buy &
how much it costs to serve these customers
– By analysing these data’s, customers can be
segmented (identify the profitable customers)
– To retain these customers, companies have to tailor
the offerings to meet these customers requirement.
– So, an iterative learning process helps in building a
relationship
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20. FOUR KEY STEPS IN RELATIONSHIP BUILDING:-
1. IDENTIFY- requires the company to locate &
contact a large number of customers & know as
much details.
– most organizations will have scattered data base
and requirement is for centralised data.
2. DIFFERENTIATE- customers can be
differentiated on the basis of the value they
represent & also on their needs.
– ideal measure for customer value is the profit they
contribute. More valuable they are, more the
company should be interested in retaining
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them.

21. 3. INTERACT- Purpose of interaction is to learn
more about the customers - starting with more
valuable customers.
Different point of contact: purchase , using
service or even making complaint.
Use of electronic channels
4. CUSTOMISE- The last step is most critical as it
builds upon all the learning about the customer
to offer tailor made service based on the data
collected. 21

22. THE LADDER OF LOYALTY
(6) PARTNER
ADVOCATE(5)
(4) SUPPORTER
CLIENT (3)
(2) CUSTOMER
PROSPECT (1)
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23. THE LADDER OF LOYALTY SHOWS HOW A
PROSPECT BECOMES A CUSTOMER, A
CLIENT & FINALLY A PARTNER
1. PROSPECT:- The prospect is an individual in
retail market (B2C) or an organization in the
business market (B2B), which fulfils the
requirements of the marketers definition of target:
(potential buyers)
2. CUSTOMER:- The prospect becomes a customer
when gets attracted by the marketers offerings &
buys the product/service.
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24. BMW Turns prospects into Customers
Prospects who interact with the company are 3 times more likely
to buy
Track path a customer takes before buying
Brochure , visit to dealer , attend an event , design virtual car,
test drive ,
 collect the data from all touch points
Parse the relevant data
Continue the dialog via email, direct email , personal invitation to
some events
Learn about the customers needs and preferences
 turn prospect to customer
After customer , feedback thru CSF and back to dealers
Resolve the problems and suggestions so that he moves up the
ladder.

25. 3. CLIENT:- A customer becomes client when he buys
the product/service more than once. A customer
may make an initial purchase as trial or test. If
satisfied, makes repeat buy. Services – customer
satisfaction is very important. E.g. in Retailing ,
Hospitality , airlines or FMCG –fast switching
4. SUPPORTER:- A client becomes supporter when he
is satisfied with the offering & recommends it to his
friends & acquaintances. Positive word of mouth
(POM) has major impact - Evangelism required to
convert Prospects into Customers
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26. 5. ADVOCATE:- Is a supporter who in
addition to referrals, proactively works
with the company to improve its
products or services.
EX:- S/W Companies depend on the
feedback of lead clients in Beta test
phase.

27. 6. PARTNER:
An advocate becomes a partner when they become
actively involved in the decisions of the company.
In many cases there are joint investments resulting in
structural bonding for mutual business gain (B2B).
EX:- P&G and WAL-MART . Wal-Mart shares scanner data
from 4,500 stores checkout counters about movement of P&G
products , stocks in order to plan replenishments.
It helps P&G to plan Production , low inventory as decision is
based on actual sales data rather than sales forecast.
EX:- FEDERAL EXPRESS & IBM for stocking & moving spare parts
for IBM on the instructions from IBM service personnel.
The reliability , operational efficiency of FedEx services makes
it cheaper and faster for IBM.
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28.  The marketer’s emphasis during the first two
steps in the ladder - prospects & customers is
Customer Attraction
 While during subsequent steps is
Developing & Enhancing Relationships.
 Greater value is added by involvement of
customers, sharing of information and bonding
between customers and marketers.
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29. BONDING FOR CUSTOMER RELATIONSHIP
1. FINANCIAL BONDS:- Volume & Frequency
Rewards (frequent flyers /reward program for
hotels) , Bundle and Cross selling
(Magazines, credit card ,telecom & Internet
services) and stable pricing .
2. SOCIAL BONDS:- Personal
Relationship(Doctors, Teachers ,
Accountant), Social bonds among customers
(Clubs – Harley Davidson Owners Club ,
Hero Honda Passport program , Airtel’s
‘Friends and Family offer’ .

30. Thanks to a CRM System, Hero Honda Adds 1.7 lakh Customers Each Month
Hero Honda’s CIO, Vijay Sethi, launched project Goodlife, a CRM initiative
The CRM project changed the way Hero Honda’s customers viewed the world’s
largest motorcycle manufacturer
It took an existing idea called the Hero Honda Passport program (that allows
customers to collect points on purchases or servicing) and widened it
Use IT to reach a larger customer base.
Goodlife replaced the paper membership cards of the Passport program with
magnetic cards.When a magnetic card is swiped, representatives at Hero Honda
showrooms or workshops can view all of that customer’s information, speeding up
and racking up points for them
It’s a claim that the business backs. “90,000 people registered as members [of
the Passport program] every month until last year,” .now an average of 1.7 lakh
customers every month.”

31. 3. CUSTOMISATION BONDS:- Mass Customization & Innovation by
knowing deep knowledge about customers which is increasing with
every interaction.
Marriot Hotels knows the likes, dislikes and special habits of its over 5
Million customers
Mass Customization: Customize your own Jeans by Lewis , NBC , Japan
makes varieties of bicycle (11 million) using flexible manufacturing
systems
4. STRUCTURAL BONDS:- Joint Investments & shared process &
Equipments.
EX:- P&G and WAL-MART
FEDERAL EXPRESS ties its customers thru PowerShips
American Express bonds with the customer thru use of Debit Cards and
TRS ( Travel Related Services)
TRS takes care of travel & stay need of executive for its corporate client.
Amex consolidates expenses and present it to the client organization in
the format required by accounting system- Executive wise , Location
wise , Budget vs Actual

32. CRM in B2B MARKETS

33. C.R.M. IN B2B MARKETS
 Business markets are many times bigger than
consumer market.
 B2B MARKETING STRATEGIES:-
1. Focus on key customers & build strong
relationship.
2. Proactively generate high level of customer
satisfaction with every interaction.
3. Anticipate customer needs by careful study of
customer process & behavior.
4. Build close ties with customer sometimes by
integrating their systems.
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34. 5. Finally, create a value perception for customer
– should see the relationship bringing value &
adds to their competitive advantage.
 C.R.M & KEY ACCOUNT MANAGEMENT
 Key account management is one of the most
popular & successful approaches used for
customer retention & development.
 It has been recognized as an important part of
the C.R.M in B2B marketing.
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35. KEY ACCOUNTS
 Key account can be defined as a customer
in a B2B market identified by a selling firm
as of Strategic Importance.
 Other terms are national accounts or major
accounts.
 Key account may be based on profitability or
can be on prestige or Reference value or
because they permit access to new markets
and technology.
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36. Lifetime value of a customer
•Lifetime value of a customer Revenues and intangible benefits
such as referrals and customer feedback that a customer brings to
the seller over an average lifetime, less the amount the company
must spend to acquire, market to, and service the customer.
C.R.M. s/w package have account management modules
that offer scope for profitability analysis. They generate
financial analysis report & help assess impact of key
decisions.

37. ELECTRONIC DATA EXCHANGES AND WEB SERVICES
•Electronic data interchanges (EDI)
Computer-to-computer exchanges of invoices,
orders, and other business documents.
• Web services—allow companies to
communicate even if they’re not running the
same or compatible software, hardware,
databases, or network platforms.

38. B2B in Railways – Freight Case Study
Demand forecasting module for planning of Rakes
Study of customer data for analysis of movement of
goods
KEY ACCOUNTS – FCI , COAL India Limited , IOC ,
CCI , JNPT ,Fertilizers Corp of India etc
Sidings are made so that no other mode of transport
Loading / Unloading – weight , tonnage and freight
calculation
Module for tracking of movement of Rakes for ETA
E transmission of RR
E payments from corporate accounts
Generation of reports for analysis of data

39.  C.R.M. IN B2C MARKET
 A major factor for services sector
(telecom/banking/airline/hospitality etc) – kind
of contact with customers.
 Since customer contact is not one time but
repeated, it is essential that service delivery
method is perfect as much as possible
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40. CRM in BANKING INDUSTRY
Competitive pressure in the banking & financial
services sector is increasing due to
deregulation & globalisation.
– It has become imperative for banks to move away
from traditional transaction based view of banking
to total relationship orientation for long lasting
profitable relationship.
– Banks now provide multiple channel of service –
across counter, phone ,ATM, internet.
– Provide more services, wider range of products to
select from reduce routine & minor interaction.
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41. BANKING INDUSTRY
– A successful C.R.M strategy in banking industry
considers following aspects:-
– First step is to emphasis customer relationship to
the staff who are in contact with the customer &
play important role.
– Classify customer by transaction volume,
channels used, products & services used to get a
better understanding. This needs effective
information systems for tracking product &
channel usage.
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42. BANKING INDUSTRY
– All employees need to be trained for
relationship management.
– Appropriate policies & relationship pricing
to reward loyal customers.
– Initiate customer contact programme from
time to time.

43. C.R.M. IN AIRLINES INDUSTRY
– High capital intensive industry with huge
initial capital investment recovered over a
period of time.
– Prolonged customer contact like hospitality
industry.
– Intense competition with relative ease of
switching by customers.
– Various strategies to retain customers: -
differential pricing & Service for business
class travelers/frequent flier program
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44. providing accommodation for flight
disruption/advance booking-lower price/travel
concession etc.
– Training of staff in C.R.M. To cope with irate
passengers, help desk/IVR for flight schedule
change etc.
 C.R.M. IN TELECOM SERVICE
– Service range from basic telecom to value
added service like internet access, cellular
phone etc. 44

45. C.R.M. in Telecom Industry
– With opening of telecom sector competition
increased, switching is easy & attracting /
retaining customer needs focus on C.R.M.
– Fundamental idea of a C.R.M. Program is to
retain customer & increase their life time
value by building loyalty.
– Provide quality service by using technology
to cater to peak loads/channel noise, cross
talks to be reduced & provide services that
differentiate from competitors.
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46. C.R.M. in Telecom Industry
Use CRM tools like data mining to identify the
customers who are likely to defect.
Prevent them by giving them better offers
Call centers to provide effective information about
the services they provide
Payment options
Attend to customer complaints about billing ,
services and other such problems
Loyalty programs where old and heavy users are
rewarded with differential pricing , free air time or
other incentives.

47. C.R.M. IN HOSPITALITY & TOURISM INDUSTRY
– Largely people based & driven by people
– Customer interaction takes for longer time
duration (stay) from booking of room to
check out.
– Hence, employees, environment (eating
place, rooms etc) & process have a
significant role.
– Main philosophy is to cultivate
understanding & caring for customers,
anticipate their needs, warmth & 47
concern.

48. C.R.M. IN HOSPITALITY & TOURISM INDUSTRY
– Idea is to retain customers & make them visit
again. Value for Money
– Employees to not only meet expectations but
exceed them again and again.
– First step is to know the customer well &
information systems can capture such information
from various contact points.
– These are analyzed & shared across organization.
– Such info helps employees to serve the customer
better.
– Ex:- Hilton hotels.
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49. CRM in hospitality
Employees are important part – training , morale , welfare
Well defined processes and proper feedback
Frequent usage program – points accumulated which can
be redeemed for free stays or service
Membership program – regular customers are encouraged
to be member of exclusive club – choice of hotel , location ,
free stay for children
Keep in touch with frequent newsletters and publications
which offer sightseeing or advisory services.
POM or loyalty . Hospitality is one industry where
referrals play important role.

50. Titan Watch Repair Services
• The Titan Signet CRM initiative was undertaken in May
1995 to provide that ‘extra’ touch to its special customers at
the exclusive World of Titan stores.
• Its mission was to create a sense of belonging of the
customer to the store and vice versa by:
Building a special relationship with high life time value
Titan customers
• Recognizing and rewarding his/her loyalty to Titan
• Providing a platform for direct feedback from these valued
customers to the company
• It initially started in 6 showrooms in Bangalore. Today the
Titan Signet has been extended to 102 World of Titan
showrooms across 59 cities all over India.

51. While the program has taken customer bonding one step further in
Titan, there are many behind-the-scene activities as follows: -
 Showroom Personnel are trained not only in the operations of
the program at the showroom but also in the finer details of
CRM.
 Enrolments in the program are tracked on a monthly basis for
each showroom, along with data on purchases made by Signet
members who have returned to the showroom to buy again.
 Signet operations form a part of the quarterly appraisal for their
showrooms, thereby ensuring that they earn more marks on their
efficient and effective performance.
 A grievance redressal system is in place to ensure that our
valued customers are responded to within stipulated time.

52. Steps to improve CRM
1. Build a database
2. Analyse, define types, profitability
3. Customer selection
4. Activities to delight selected customers
5. Analyse again to see how we’re doing