• CRM as a competitive strategy - a strategic view
• Customer satisfaction and loyalty
• Relationship: selection and retention
• Customer service and service marketing
• Sales Force Automation (SFA)
• Implementation of CRM

Key concepts of CRM are:

• Comprehensive strategy:

  CRM at one end links itself to SCM - supply chain management and on the other hand the customer service and customer care. This makes a comprehensive strategy.

• Acquiring:

  This is about prospecting. Using effective sales promotion methods, prospective buyer can be acquired. It is about developing new customer as well as converting competitor's customers.

• Selection:

  You can't please all people at all times. You may not be able to serve and satisfy all the customers at the same time. There may be customers who may not be willing to have long time relationships with you. As a consequence you need to have selectivity in the customers as well.

• Retaining:

  Once a right customer is selected, we need to provide the customer with a good product and a better service which exceeds the customer requirements. Only then can the customer be satisfied and retention of a customer can be possible.

• Partnering:

  Partnership is about constantly striving to create better value for each other i.e. the buyer and the seller.

• Interactive communication:

  A clearly planned and focused two way, interactive communication is a very essential ingredient of CRM. A meaningful communication will always be an Interactive Communication.

• Technology + people:

  CRM is all about people and relating people to technology. This is all automation of people is all about!

• Mutually beneficial longterm relationship:

  It is all about the long-term relationship of the buyer and the seller. This overall results in the mutual benefit of both resulting in a long-term relationship.

Customer delight needs to be created instead only satisfying the customer. Customer service is about giving facilities and services that the customer asks for, or delivering service that is expected in today's competitive world. Most products require additional or long-term support from the organization. These traditional services include delivery, installation, lessons-in-usage, instruction manuals, repairs and maintenance etc. Customer care (and also customer delight) is going beyond the "expectation check list". Customer care is being proactive in developing relationship with your customer. Always remember “Good customers are worth keeping for life”. Great services can create a great experience and customer delight.

Customer Retention:

The point to be remembered always is that a repeat customer is the best customer. 6:1 is the ratio which means - you need to spend 6 times the money you spend in retaining an existing customer. Another view point is 5% increase in retention of customer can add 25% to 125% increase in profit. Essentially, retention is the key. However, not all your customers are worth retaining. You should select the customer for retention. These customers should be the right ones with whom you wish to establish a long term benefit for mutual benefit.

There are a number of benefits for selection of the right customer for an organization:

• It reduces cost
• It increases profitability
• It helps create goodwill for your organization
• It gets you good word-of mouth publicity
• It improves the possibility of greater customer satisfaction and loyalty

Thus, it's needless to say - select the right customer, have the right understanding of their needs and evolve a right way to satisfy them.

The Service Marketing Triangle

The Service Marketing Triangle shows the relationship and linkage between three elements of service marketing - Company, Customers and Employees. Three types of marketing happen between these 3 elements.

• Company to customers: External Marketing
• Company to employees: Internal Marketing
• Employees to customers: Interactive Marketing

External Marketing:

Internal Marketing:

Interactive Marketing:

Sales Force Automation (SFA):

SFA is Sales Force Automation. Understanding SFA begins with the study of basic selling process and the importance of FAB (Features, Advantage and Benefits) approach to selling. It then moves to the technology of Automating Sales process.

SFA is a technological tool to help sales people acquire and retain customers, which helps in reducing administrative cost and provides good basis for account management. It increases better selling chances for the Salesperson and more business for the company. SFA helps in the following ways:

• It helps a company to get customer retention and hence increase profits
• Customers get better information, better products or services, faster responses to their queries and hence this results in Customer Satisfaction

The reasons why SFA is important to CRM are:

• Reduction in cost of selling
• Increased revenue
• Easy availability of customer information
• Increased sales force mobility
• Meeting increased customer expectations

CRM Implementation:

The most difficult part of CRM is implementing it. Implementing CRM - making it a reality is the real challenge and the purpose of any CRM initiative. When do you say that CRM has happened? When:

• Your customer is more than satisfied; he/she is delighted
• Your customer attrition rate is minimal. Thus, the selected customer is retained.
• The bottom line improves: the profits multiply

Implementation starts with questioning the basics of your business; defining business, redefining your strategy, setting up plans, implementing and evaluating the CRM. Implementing CRM is about creating a change and an urge in your organization to become customer centric. The first important factor taken into consideration while implementing CRM should be people; because CRM is nothing without people. Secondly, technology and the process play should be taken into consideration. A good product or service, sound process, technology and able people are some of the important baseline requirements to begin with the CRM initiative.

Unless you have the CRM merits in place, it is not possible to judge if you are going in the right direction. CRM evaluation has to be in place and predefined before you begin implementing CRM.

Common causes of CRM failure:

• Treating CRM = Technology + Automation
• Large-scale systems with long-term promise are better
• Old organizational mindset
• Lack of CRM understanding
• Poor strategy and planning
• Lack of skills essential for CRM
• Inefficient or inappropriate software
• Lack of commitment

A famous saying in India states a customer to be God. It has all been from the Vedic ages but the fact being people have started noticing it as a specific field of management study for not more than five years, commonly known as Customer Relationship Management. You need to take care of your customer even for the slightest hiccup in his smooth ride on your product. All you need is to have a good professional relationship with your client.

You lose a customer when you don't meet their needs.

Business today is expanding in a manner water spreads being poured on an inverted cone. It has been expanding all over through verbal marketing, through advertisements on communication channels like TV and radio, through hoardings in public places, and the fastest mode of communication “The Internet”. The Internet is a perfect place for customer service. It provides an area for the customers to find the exact piece of information they need.

Customers today expect higher-quality goods, better service and quick delivery. This is where CRM comes in. It's all about understanding and following up with the customer needs, a good quality of product and service, and a fast delivery.

How does CRM improve your relationship with customers?

Some examples of its value to your business include:

• Expediting responses to customer inquiries,
• Increasing company knowledge of customers, and
• Identifying profitable business activities

Feedbacks should always be accepted from your customers in a positive manner. An appreciation from a client means working to get similar appreciation from the rest of your customers. But, most of the people do not accept the negative feedback from customers in a positive manner.

Instead of accepting it as a delta people generally retaliates against it. However, with the information gained from a CRM system which provides customer feedback, it should be used to improve products and services. This would also mean sharing information with your partners to ensure customer satisfaction.

What's the value of implementing a CRM?

Some of the values of implementing a CRM are:

• Your goods and services will improve based on your impact from customers. Valuable feedback from your customers will allow you to more directly meet their needs.
• You will increase the speed of your response to customer concerns. This will result in happy and loyal customers, which in turn will impact your company's bottom line.
• Your knowledge of your customers will grow. You will better understand your customer needs and will therefore be more able to meet those needs resulting in satisfied customers.

“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.

Customer Relationship Management puts the business focus back on the customer where it belongs. CRM combines business process and technology to create a better understanding of customers. Consequently, Customer Relationship Management is also known as Client Relationship Management. CRM helps to identify new customers and retain existing customers. To reach consumers who will truly benefit from your services, it's important that marketing campaigns define clear objectives and goals directed at an appropriate audience. The audience is defined through CRM.

The Marketing Team of a company uses CRM to identify commonalities among clients. With this information the company's marketing strategy becomes more focused and effective. Sales Team as a consequence notices the number of new customers and profits from existing customers' increases as the company improves its ability to meet client needs.

CRM allows you to customize relationships with individuals to provide a higher level of service. An effective CRM system will help you exceed your customers' expectations by offering them what they need - before they have to ask for it. CRM can create a personalized approach. It can also create a personal approach to customer service.

CRM can ease the exchange of information throughout every department in a company, personalize interactions with consumers to increase customer satisfaction, assist in pinpointing potential clients and monitoring relationship with the current clients. In a nutshell, CRM will assist you in identifying new customers and retaining existing customers. It will streamline information exchange, and it will customize relationships with individuals to provide a higher level of service.

CRM won't make you smarter; it will help you serve your customers by identifying their expectations.

CRM focuses on enhancing service to exceed your customers' expectations. How is this accomplished? By allowing all the departments access to the same information. The second goal of implementing a CRM system is using integrated information to create top-quality service. Customers' don't want to repeat the same information over and over to everyone they speak with. You'll save time and minimize customer frustration by sharing information internally.

Consider a simple example: Getting help from a new friend is tough as compared to getting help from an old friend. Similarly, research has shown that it costs 6 times more to sell to a new customer than an existing one, and your odds of selling to an existing customer are 50% better than selling to a new one.

What are the goals of implementing a CRM?

Some of the goals of implementing CRM are:

• To create a sense of loyalty with your customers
• To realize higher profits through better customer relationships

An effective CRM system takes the customers' view, not the products' or company's view.

There are three stages in CRM. None is more important than the others, but you will need to make one your primary focus - without abandoning the other two,

• Acquiring new customers
• Increasing the profitability of existing customers
• Retaining existing customers

The first stage of CRM is acquiring new customers. Through existing customer testimonials, product quality and availability convenience, and innovation; you can attract new customers to your company. The next stage of CRM is increasing the profitability of those existing customers. Apart from enhancing relationships with the customer through cross-selling and up-selling, it also offers the consumer great convenience at reasonable costs. If you have everything the customer currently needs, make sure he knows it.

To truly see the benefits of the customer/seller relationship, you must sustain customer loyalty. The third stage of CRM is retaining existing customers. Not only do you have to offer products the market wants, but you must also offer what your customers want. Your goal is to retain your customers for life. Many companies focus in this aspect of CRM because the greatest percentage of sales comes from existing customers.

Focusing a company's goal on customer satisfaction is a major benefit of CRM. Another advantage of implementing CRM is that it redefines marketing strategy so that it is more effective. Transforming to a CRM system aligns your organizational structure with actual business operations.

A key advantage of implementing a CRM system is that it re-concentrates the single focus of product performance on to the customer. CRM is a bridge linking an organization to its valued customers. Implementing a CRM system dramatically affects everyone involved. It requires a political, cultural, and organizational change. CRM cuts a wide swath across the entire organizational body that it demands a more cohesive approach toward meeting goals.

Current incentive systems may work against CRM because they reward only a portion of the customer's relationships with the company. Therefore, your organization may lack an incentive program that supports a CRM system. The challenge of implementing a CRM involves the cultural resistance to the change it requires. You also need to embrace the international market and create an infrastructure to facilitate the new system.

To find out what your customer wants, you need to understand and identify the elements of the CRM loop. The CRM loop is the fundamental cycle of activity that drives CRM programs:

• Comprehension and Differentiation
• Development and Customization
• Interaction and Delivery
• Acquisition and Retention

The four stages of CRM loop are an interdependent and continuous cycle of activity. All your initiatives and objectives must be intrinsically connected to this core cycle of action to get the best results.

As you transition from one stage to another, you will become more adept at implementation processes and achieve deeper insights that will improve each successive effort.

So how does a CRM loop work? What are the purposes of the four stages and how they interrelate with each other? This underlying core of activity will be your primary method for gaining knowledge and understanding your customers. The CRM loop will also help you decide what subsequent actions to take. This helps you identify, connect, and hold on to your most valuable customers.

• Comprehension and Differentiation:

  As you learn, you will be able to zero in your valued customers quickly. And you will also attract new ones with similar learning's. Retention comes by listening vigilantly so you are prepared to modify your services when customers change their preferences.

• Development and Customization:

  Use analysis and research to comprehend what your customers' value. Then use your understanding to show customer that your organization is differentiating its services based on what they have told you and what you have learned independently.

• Interaction and Delivery:

  A basic principle of CRM is to develop products and services based on customers' needs and expectations. Although most companies can't afford to customize products for individual customers, they can customize the products for a proven customer sector.

• Acquisition and Retention:

  Besides marketing and sales channels, customers interact in many ways with your organization, including shipping and distribution and customer service. With new information, you can progressively enhance the value you deliver to your customer.

Value is the quality of product, the service, the convenience, the ease of use, the responsiveness, and the excellence of customer service. Value isn't just about the price of the product. A customer interacts with an organization in many ways, including shipping, distribution, and customer service.

The infrastructure provides the solid foundation, but the core competencies provide the heart and soul of a successful CRM system. It is here that the philosophy of CRM is expressed. The first vital core competency is the fine art of up-selling. Up-selling in a CRM environment means identifying your customer's needs and then matching their needs to complementary products and services. The result is a richer, more profitable customer relationship. One aspect of up-selling is event-driven marketing. By implementing up-selling software, you can track customer contacts and establish triggers to identify prospects for additional sales.

A second core competency of a successful CRM system is direct marketing. Direct marketing is the pre-sale interaction with potential customers. This involves the use of advertising techniques to influence and provide your customer with the information needed to make a purchase decision. As your business grows, you will be deluged with requests for information; be sure to manage the fulfillment end of this potentially overwhelming process.

The third core competency of a CRM system is customer service. The goal of an effective customer service program is to provide support and to assign, create, and manage service requests for the customer.

Walking hand in hand with the customer service is field operations, the fourth core competency. Field service is the hands-on extension of customer support. It comes into play when a problem cannot be solved over the phone.

In a nutshell core competencies of CRM are:

• Up-selling
• Direct Marketing
• Customer Service
• Field Operations

To involve the entire organization in CRM, you must be able to identify the benefits of such a system. What are these benefits? An effective CRM system will help you remain ahead in competition, tap into the world-wide market, instill loyalty in your customers, decrease cost, and increase profits.

Integrating a CRM system will help you decrease costs and increase profits, tap into the worldwide market, and remain ahead of the competition.

Effective sharing of client information throughout a company is the key ingredient for successful CRM.

Some examples of CRM information sources are:

• The Internet:

  Tracking visits to your website can give you a good idea of what customers are looking for some pages might get more hits than others indicating a demand for certain products. Using this information within a CRM framework will help you focus on customer needs.

• Customer Surveys:

  Surveys can be given online or through the mail. An effective CRM system can take this information and make it available to marketers, sales people, and customer service people. With a clear understanding of customer needs, each department is more likely to meet those needs.

• Customer Purchasing Habits:

  With data mining and other techniques, you can learn what your customers buy from you. What are your top selling items? Who's buying them? What isn't selling? Answers to these questions and more lie in customer purchasing habits.

• Customer Service Calls:

  Anytime a customer calls you is an opportunity to learn more about him. A CRM system designed for your company can help service representatives increase knowledge of your customers.

The second way to understand your customers is to integrate customer information into your company's system. This allows everyone access to customer information. Marketers can identify customer demographics. Sales people can generate new leads based on customer buying trends. Customer service based on the information gathered.

The Internet is driving a revolution of one-to-one marketing and mass communications.

Effective sharing of client information throughout a company is a key ingredient for successful CRM. The first key to successfully implementing CRM is Integrating Internal Business Processes. Creating a seamless flow of information throughout your company isn't always enough. You should include external business partners in your information stream. Sharing customer information is essential to meeting your customers' needs. Consider third party suppliers and vendors as an extension of your business, and use them to provide solutions for your customers. A CRM infrastructure using Web-based applications can eliminate communication hassles and cost overruns.

To successfully create your own CRM infrastructure, you must integrate computer systems. Theses systems are known as “enabling technologies” that work together to provide more fluid CRM system.

With more powerful applications in the future, this integration might not be necessary, but because methods of delivering information is so varied, you need a CRM solution that can handle information across all delivery channels.

• Legacy Systems:

  Many companies rely on 20 year old systems that cannot simply be replaced. Because of this fact, special software tools, such as “middle ware”, become part of the CRM solutions. This software helps integrate old legacy systems with new CRM applications.

• Computer Telephony Integration (CTI):

  CTI is used to manage incoming calls. It allows information about a caller to be entered into a CRM data repository. This information becomes a valuable part of the entire CRM process because it helps determine what solutions the caller requires.

• Data Warehousing:

  With all the information gained through CRM, data warehouses become invaluable tools. Not only do they store the enormous amount of information you have gathered, but they also supply you with the material needed for customer research. Data warehouses offer customer data for later analysis.

• Decision Support Technology:

  You need a way to analyze the information in your data warehouse. Decision support technology is a set of analytical tools that help you make decisions based on accumulated customer data. You won't get the most out of your CRM system without these tools.

A CRM system creates a new approach to customer service. To ease the transition, everyone in the organization must understand and contribute to the CRM process. The first step is involving the entire management team to establish the CRM strategy throughout the company. Adopt an approach that is consistent with your company's overall approach to its business. Involve leaders from marketing, sales, IT, and customer service. Discuss their future goals and explore ways that CRM can help them meet these goals.

The second step is involving the entire management team to define your CRM integration goals. Identify how you'll track your customers; what software is most appropriate, what vendors can help you, etc. Understand your customers and create a business plan to meet their needs.

Once you have defined your vision and established a strategy, its then time to measure company readiness. This is the third step for involving the entire management team.

The final step in involving the entire management team is to monitor progress through stages. Because of the complex nature of CRM, approaching is through stages. Because of the complex nature of CRM, approaching is through stages that will create a better chance of success. Create a time line for strategy evaluation. Set milestones you hope to reach and continually check your progress.

Through an effective e-CRM system, you can personalize interactions with your customers and expedite the closing of business transactions. e-CRM and data mining systems help personalize interactions with customers. It also creates interactions based on relevant customer information, and expedites business transactions.

e-CRM and data mining systems help personalize interactions with customers. It also creates interactions with customers. It also creates interactions based on relevant customer information, and expedites business transactions.

E-CRM makes it possible to recreate the customer service of the past. Companies can use technology to combine a personal touch with customized service and the illusion of the one-to-one shopping of the past. The four features of e-CRM are:

• Information Analysis
• Customer Personalization
• Direct Marketing
• Simplified Transactions

The first feature of e-CRM is information analysis. With e-CRM, your ability to collect and analyze information is more efficient. It will help you determine inventory sizing, product pricing, sales items, credit policies, and other business decisions. With the analysis of you will be able to effectively use the second feature of e-CRM: Customer Personalization. Individual relationships with customers can be created and maintained through e-CRM. An effective e-CRM system will gather customer preferences and ensure customer-made shopping experiences for each customer.

Technology allows mass-market efficiency with a personalized feel. You can recreate the shopping experience of a mom-and-pop store at minimal cost through the third feature of e-CRM: Direct Marketing. Customers can order goals online and give you permission to send them additional personalized messages about new products, sales item, and other services you want to offer. e-CRM allows you to simplify transactions, analyze information, and create effective direct marketing material.

Companies that focus on customer information and use that information to maintain relationships are most successful in the market place.

What is data mining? It is the process of analyzing enormous amounts of data to identify meaningful patterns. Data mining is used for:

• Research
• Process Improvement
• Marketing

Data mining is an important tool for lowering overhead costs. The first way data mining facilities business operations is as a research tool. Research and Development is a costly process that can be streamlined and automated through data mining. Data mining lowers costs from the beginning of the manufacturing cycle, during the research and development phase, by quickly shifting through vast amounts of information.

Manufacturing and inventory control is another area in which data mining can help your company cut costs. The second way data mining facilitates business operations is through process improvement. Data mining systems can monitor processes to ensure that variables can be monitored and connected through data mining. Although both research and process improvement; are valuable aspects of data mining, they are the least customer - oriented aspects of it.

The most successful use of data mining is in marketing. This is the third way data mining facilitates business operations. Data mining uncovers information that reveals buying behaviors of existing customers. All useful marketing information is available in your customer database. Data mining will help you sift (distinguish) through it all.

Data mining streamlines and automates research methods, improves business processes, and identifies valuable marketing information. Customer database are an unlimited source of information. They are important business tools, but they are technical aspects of data mining that require knowledge of algorithms, decision trees, and predictive models.

Some technical aspects of data mining are:

• Decision Support Technology
• Directed Classification and Prediction
• Undirected Association, Clustering, and Recognition

The first technical aspect of data mining is decision support technology. Decision support covers the entire information infrastructure system that companies use to make informed customer decisions. It's based on recognized data patterns. Data mining helps, identify those patterns.

• Data Warehousing:

  A data warehouse is a database that stores information from a variety of operational systems. It allows companies to view information as a single entity rather than as a collection of information bits.

• Online Analytical Processing:

  OLAP databases are often speedier and more clearly organized than data warehouses, OLAP databases organize information along specified variables and allow for more precise analysis of the information they contain.

• Integration of Decision Support:

  Facts churned out by databases and mainframe computers don't always create a vivid enough picture to create solutions. Decision support technology is a collection of software and hardware that allows you to visualize the information gained through data mining.

In data mining, you use data to build a model demonstrating how every record in your customer database can be categorized based on any combination of variables.

This method is the second technical aspect of data mining: classification is the method of categorizing record in a database by predefined criteria - for e.g. assigning customers to specific purchasing categories. Prediction is taking the mined customer information, analyzing it, and predicting how customers may react in the future.

Undirected data mining is an automated process in which similarities among all records in a database of customer records are found. The third technical aspect of data mining is undirected association, clustering, and recognition. Some technical aspects of determining are directed classification and prediction, undirected recognition and clustering, and data warehousing and OLAP.

In directed data mining, you use data to build a model demonstrating how every record in your customer database can be categorized, based on any combination of variables.