CRM Introduction

This chapter covers the basic introduction to Customer Relationship Management. It provides a conceptual foundation to CRM practices and implementation of the CRM

1. 1 Customer Relationship Management A Conceptual Foundation Lecture by M Srinivas Asst. Professor                      

2. 2 Learning Objectives After completion of this chapter, you will be able to: Acquire the conceptual understanding of the CRM. Identify the Stakeholders in CRM practices. Apprehend the advantages accruing to the organization on the account of the successful CRM Practice.

3. There is only one boss; the customer. And he can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else. - Sam Walton: Founder, Walmart Stores 3

4. Introduction to CRM Introduction to CRM – Relationships Developing close, cooperative relationship with customers is more important in the current era of intense competition and demanding customers than it has been ever before. 4

5. CRM: A Historical Perspective CRM often considered as database marketing primarily linking marketing of the organization with the database of the customers. Some theories have been considering it an exercise for customer retention as many theories and studies have been emphasizing on the rationale for keeping customer. 5

6. Strategic Orientation in Marketing McKenna (1991) emphasized on strategic orientation……. Berry (1995) focused on developing closer relationship with the newly attracted customers. 6

7. Definition of CRM CRM is comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and for the customers. – ( Parvatiyar and Sheth 2001) CRM is considered as strategic process oriented, cross-functional and value creating for buyer and seller and a means of achieving superior functional performance. - (Lambert 2004) 7

8. A CRM system is a combination of people, process, and technology that seeks to provide understanding of a company’s customer and to support a business strategy to build long-term , profitable relationship with customers. ( Shang and Feng Ko 2006) CRM is defined as an effective tool to achieve the objectives such as satisfied and loyal customers and increased market share. ( Shafia et al. 2011) 8

9. “CRM is a continuously updated process of identifying relative value of customers and designing customized company interaction to delight them so that they do not just remain with the company profitably but also be the company's ambassador. Full involvement and empowerment of employees and appropriate technology are two essentials for successful CRM” 9

10. CRM is a process It needs continuous revision and updation Customer value identification is a must Company interaction requires customization suiting to the exclusive profile of customer. It strives for the customer delight CRM process aims at profitable relation with the customers It also aims to convert them to act as a company’s brand ambassador Employees involvement and empowerment is a must for its successful implementation Adequate technological support is also essential for successful CRM 10

11. Emergence of CRM Introduction Computerization Telecommunication Adopting TQM Digitalization 11

12. CRM Cycle Obtaining information from customers Creating superior customer value Building loyal customers Acquisition of new customers Working towards increasing profitability 12

13. Stakeholders in CRM Customers Employees Suppliers Partners 13

14. Significance of CRM Perpetual stream of revenue Positive referral creation Provides premium Helps customer retention Lowers cost of sale Helps understanding customer behaviour Provides opportunity to cross-sell and up-sell Reduces marketing time Channel cost rationalization Enables business process re-engineering 14

15. 15 Case Study