Preface

Under the study of CRM in Retail Sector we would come to know about the importance of CRM as well as concern about the CRM, its limitation and obligations about using it on Retail sector. The study is useful for those management students who wants to know about the recession impact on Retail industries and also want to build there career in CRM and Retail. Se eral companies are turning to customer!relationship management systems and strategies to gain a better understanding of their customer"s wants and needs. Used in association with data warehousing, data mining, call centers and other intelligence!based applications, CRM #allows companies to gather and access information about customers" buying histories, preferences, complaints, and other data so they can better anticipate what customers will want. The goal is to instill greater customer loyalty.# $ther benefits include%

&aster response to customer in'uiries. (ncreased efficiency through automation. )eeper understanding of customers. (ncreased marketing and selling opportunities. (dentifying the most profitable customers.

(*TR$)UCT($*

Customer Relationship Management +CRM, is one of those magnificent concepts that swept the business world in the -../0s with the promise of fore er changing the way businesses small and large interacted with their customer bases. (n the short term, howe er, it pro ed to be an unwieldy process that was better in theory than in practice for a ariety of reasons. &irst among these was that it was simply so difficult and e1pensi e to track and keep the high olume of records needed accurately and constantly update them. (n the last se eral years, howe er, newer software systems and ad anced tracking features ha e astly impro ed CRM capabilities and the real promise of CRM is becoming a reality. 2s the price of newer, more customi3able (nternet solutions ha e hit the marketplace4 competition has dri en the prices down so that e en relati ely small businesses are reaping the benefits of some custom CRM programs.

In the beginning
The -.5/0s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer ser ice groups to speak indi idually to all of a company0s customers. (n the case of larger, key clients it was a aluable tool for keeping the lines of communication open and tailoring ser ice to the clients needs. (n the case of smaller clients, howe er, it tended to pro ide repetiti e, sur ey!like information that cluttered databases and didn0t pro ide much insight. 2s companies began tracking database information, they reali3ed that the bare bones were all that was needed in most cases% what they buy regularly, what they spend, what they do.

Advances in the 1990s

(n the -../0s companies began to impro e on Customer Relationship Management by making it more of a two!way street. (nstead of simply gathering data for their own use, they began gi ing back to their customers not only in terms of the ob ious goal of impro ed customer ser ice, but in incenti es, gifts and other perks for customer loyalty.

This was the beginning of the now familiar fre'uent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer acti ity and spending patterns. CRM was now being used as a way to increase sales passi ely as well as through acti e impro ement of customer ser ice.

What is Customer Relationship Management?

6efore we begin to e1amine the conceptual foundations of CRM, it will be useful to define what CRM is. 2 narrow perspecti e of customer relationship management is database marketing emphasi3ing the promotional aspects of marketing linked to database efforts. 2nother narrow, yet rele ant, iewpoint is to consider CRM only as customer retention in which a ariety of after marketing tactics is used for customer bonding or staying in touch after the sale is made. Shani and Chalasani define relationship marketing as 7an integrated effort to identify, maintain, and build up a network with indi idual consumers and to continuously strengthen the network for mutual benefit of both sides, through interacti e, indi iduali3ed and alue!added contacts o er a period of time8. (n today0s hyper competiti e scenario, more than three 'uarters of the money and time spent by companies go towards ac'uiring and retaining customers. Customer!centricity has become the bu33word and the ones with clear and relentless focus on customers, en9oy a better competiti e position. This is pro ed time and again. :et, companies go through meticulous processes to gradually and consistently mature into an 7organi3ation for the customers8. 6ut, how would you mature into a customer!focused or customer! centric organi3ation; The answer is% 6y reading and understanding your customers. :es, this is all you need to do< 2nd this you need to do not 9ust once, but regularly and consistently o er the lifetime of your customer and beyond. Reading the customer demographics and understanding their needs +both e1plicit and implicit, is what customer insight is all about. Customer insight is the basic point or the foundation for building a customer centric organi3ation. = erything in the alue chain re ol es around this. This is the raw material. This is more a con ersion process rather, since the end product is Customer >oyalty< $ er decades, many organi3ations had successfully completed the con ersion process and tasted higher returns, most organi3ations miserably failed in their efforts.

Customer (nsight goes through a set of processes to get con erted into Customer >oyalty! the finished product. The set of processes include use of machine, process and people to obtain the final outcome ! 9ust like a manufacturing process in a factory. The machine here is technology ! information technology to be precise, process ! the custom made steps based on set ob9ecti es4 and people ! those who are trained to efficiently carry out the con ersion process. This whole scheme of acti ities that begin from customer information and end in processes and interactions that result in customer loyalty ! in entirety, is what CRM is all about. CRM relies on customer data to create customer loyalty. The concept of CRM was again the result of an e olution born out of necessity. ?hen companies understood the need to obtain and maintain customer data, which was e1hausti e and scattered in nature and were desperately looking for a tool that could compile, preser e use the data in a way they want, technology came to the rescue with e1clusi e methods called data mining, data warehousing and thus data base management techni'ues were born. Technology is mechanistic and didn0t know what is re'uired and what is not. 2 managerial tool was needed to perform the director0s role in order to decide the path and processes. Thus CRM was engineered as a tool to manage customer data using (T!enabled techni'ues. CRM gi es a framework for the acti ities. (t decides on what to do ! the ob9ecti es, what is re'uired to do it ! the resources, who should do it ! the people, how to do it ! the processes, how long to do it ! the time frame. CRM could be ready made, tailor!made or hand made depending on the specific ob9ecti es it is set to achie e. CRM is uni'ue in the respect that it follows a set of pre!determined processes to accumulate and manage customer data, which was hitherto unpracticed. @ence, CRM is defined as% 7Customer relationship management +CRM, is a business strategy to ac'uire and manage the most aluable customer relationships. CRM re'uires a customer! centric business philosophy and culture to support effecti e marketing, sales and ser ice processes. CRM applications can enable effecti e customer relationship management, pro ided that an enterprise has the right leadership, strategy and culture.8

2s is implicit in the abo e definition, the purpose of CRM is to impro e marketing producti ity. Marketing producti ity is achie ed by increasing marketing efficiency and by enhancing marketing effecti eness. (n CRM, marketing efficiency is achie ed because cooperati e and collaborati e processes help in reducing transaction costs and o erall de elopment costs for the company. Two important processes for CRM include proacti e customer business de elopment and building partnering relationship with most important customers. These lead to superior alue creation. The basic concept is that the customer is not someone outside the organi3ation4 he is a part of the organi3ation.

urpose o! "sing CRM in Retail

CRM, in its broadest sense, means managing all interactions and business with customers. This includes, but is not limited to, impro ing customer ser ice. 2 good CRM program will allow a business to ac'uire customers, ser ice the customer, increase the alue of the customer to the company, retain good customers, and determine which customers can be retained or gi en a higher le el of ser ice. 2 good CRM program can impro e customer ser ice by facilitating communication in se eral ways%

Pro ide product information, product use information, and technical assistance on web sites that are accessible AB hours a day, C days a week. (dentify how each indi idual customer defines 'uality, and then design a ser ice strategy for each customer based on these indi idual re'uirements and e1pectations.

Pro ide a fast mechanism for managing and scheduling follow!up sales calls to assess post!purchase cogniti e dissonance, repurchase probabilities, repurchase times, and repurchase fre'uencies.

Pro ide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same iew of the customer +reduces confusion,.

@elp to identify potential problems 'uickly, before they occur. Pro ide a user!friendly mechanism for registering customer complaints +complaints that are not registered with the company cannot be resol ed, and are a ma9or source of customer dissatisfaction,.

Pro ide a fast mechanism for handling problems and complaints +complaints that are resol ed 'uickly can increase customer satisfaction,. Pro ide a fast mechanism for correcting ser ice deficiencies +correct the problem before other customers e1perience the same dissatisfaction,. Use internet cookies to track customer interests and personali3e product offerings accordingly.

Use the (nternet to engage in collaborati e customi3ation or real!time customi3ation. Pro ide a fast mechanism for managing and scheduling maintenance, repair, and on!going support +impro e efficiency and effecti eness,. The CRM program can be integrated into other cross!functional systems and thereby pro ide accounting and production information to customers when they want it.

Dey CRM principles

#i!!erentiate Customers 2ll customers are not e'ual4 recogni3e and reward best customers disproportionately. Understanding each customer becomes particularly important. 2nd the same customers0 reaction to a cellular company operator may be 'uite different as compared to a car dealer. 6esides for the same product or the ser ice not all customers can be treated alike and CRM needs to differentiate between a high alue customer and a low alue customer. ?hat CRM needs to understand while differentiating customers is; - Sensiti ities, Tastes, Preferences and Personalities - >ifestyle and age - Culture 6ackground and education - Physical and psychological characteristics #i!!erentiating $!!erings >ow alue customer re'uiring high alue customer offerings. >ow alue customer with potential to become high alue in near future. @igh alue customer re'uiring high alue ser ice. @igh alue customer re'uiring low alue ser ice.

%eeping &'isting Customers Erading customers from ery satisfied to ery disappoint should help the organi3ation in impro ing its customer satisfaction le els and scores. 2s the satisfaction le el for each customer impro es, so shall the customer retention with the organi3ation.

Ma'imi(ing )i!e time value =1ploit up!selling and cross!selling potential. 6y identifying life stage and life e ent trigger points by customer, marketers can ma1imi3e share of purchase potential. Thus the single adults shall re'uire a new car stereo and as he grows into a married couple his needs grow into appliances.

Increase )o*alt* >oyal customers are more profitable. 2ny company will like its mindshare status to impro e from being a suspect to being an ad ocate. Company has to in est in terms of its product and ser ice offerings to its customers. (t has to inno ate and meet the ery needs of its clientsF customers so that they remain as ad ocates on the loyalty cur e. Referral sales in ariably are low cost high margin sales.

Summari3ing CRM acti ities in Retail

The CRM cycle can be briefly described as follows% -. >earning from customers and prospects, +ha ing in depth knowledge of customer, A. Creating alue for customers and prospects G. Creating loyalty B. 2c'uiring new customers H. Creating profits I. 2c'uiring new customers

?hy CRM is necessary;

Se eral companies are turning to customer!relationship management systems and strategies to gain a better understanding of their customer"s wants and needs. Used in association with data warehousing, data mining, call centers and other intelligence!based applications, CRM #allows companies to gather and access information about customers" buying histories, preferences, complaints, and other data so they can better anticipate what customers will want. The goal is to instill greater customer loyalty.# $ther benefits include%

&aster response to customer in'uiries. (ncreased efficiency through automation. )eeper understanding of customers. (ncreased marketing and selling opportunities. (dentifying the most profitable customers. Recei ing customer feedback that leads to new and impro ed products or ser ices

6enefits of Using CRM in Retail

(mplementing a customer relationship management +CRM, solution might in ol e considerable time and e1pense. @owe er, there are many potential benefits. 2 ma9or benefit can be the de elopment of better relations with your e1isting customers, which can lead to%

increased sales through better timing due to anticipating needs based on historic trends identifying needs more effecti ely by understanding specific customer re'uirements cross!selling of other products by highlighting and suggesting alternati es or enhancements

effecti e targeted marketing communications aimed specifically at customer needs a more personal approach and the de elopment of new or impro ed products and ser ices in order to win more business in the future

enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow increased alue from your e1isting customers and reduced cost associated with

supporting and ser icing them, increasing your o erall efficiency and reducing total cost of sales $nce your business starts to look after its e1isting customers effecti ely, efforts can be concentrated on finding new customers and e1panding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base. = en with years of accumulated knowledge, there"s always room for impro ement. Customer needs change o er time, and technology can make it easier to find out more about customers and ensure that e eryone in an organi3ation can e1ploit this information.

#isadvantages @ere are a number of other mistakes sales and marketing managers make when selecting a CRM solution%

*ot integrating with accounting and marketing information, focusing too much on how sales people use CRM4 *ot connecting with ser ice departments, forgetting that customer relationships span the entire lifecycle of a ser ice engagement4 *ot planning or staging roll out with a systematic approach shaping the software to your company not the other way around4 &orgetting to set baseline measures then testing new features to dri e impro ements in your selling system4 =1pecting customer relationships management to impro e customer retention without implementing specific retention efforts4

( don"t want to scare you. There are 9ust as many drawbacks as there are benefits, some companies will see these problems more than others will. The key understanding it"s preparation for a successful rollout that can eliminate the drawbacks. Just like if you" e ne er used a hammer before, you are more likely to hit your thumb, but it"s not the hammers fault !! the same goes for Customer Relationship Management.

Retail Mar+eting in India is in Recession

The retail market in (ndia is facing slowdown with the ongoing financial crisis happening across the world markets. Since the markets always ha e internally linked with each other, the impact of the crisis is generally shared among all. The following circumstances are creating unwelcome interruptions to the (ndian retail industry. The industry hopes for the best alternations to o ercome the acrimonious situations. Mar+ets in recession ,orld,ide and India tooThe current meltdown in the world markets is shaking the globe today. *ot e en a single country seems to be off the hook. The high le el of inflation has been a wet blanket for the global markets. The roots of the world markets are nearly pulled away with the hea y downfall of the 2merican financial giants. 2mongst many countries, (ndia too not e1empted from the impact of world financial crisis. 2ll this is leading to a temporary recess for the markets from a regular busy schedule. @owe er, these fluctuations are not new for global market. &or the decades long, markets, across the world, ha e been witnessing such ups and downs. 6ut the ultimately fact is that the market growth rate is always constantly high when comparing to such downfalls. &conomic slo,do,nThe &inancial crisis is adding to the pressure on global economies. The (nternational Monetary &und +(M&, now sees the world entering a ma9or slowdown. The reco ery would depend on three key factors% commodity prices stabili3ing, the crisis in the US housing sector bottoming out, and emerging economies pro iding a source of resilience. 6ut, if the current crisis were to last longer, the emerging economies are more likely to be affected. .he impact on in!lationThe inflation or the economic slowdown is ad ersely affecting the retail industry. ?ith the suddenly disturbed economical status, consumers are gradually losing interest on buying. 2nd for the interested, the unbalanced income, followed by the economic slowdown, is not meeting their buying re'uirements. This e olution had soon disappointed the hopes of retail industry. 2nyhow, it0s all a short!term crisis for the retail industry until the things turn around. )o, mar+eting and advertising budgets ,ill ,or+ outTo rectify the things, right solutions are always e1ca ated. ?hether the market growth is slower or faster, its potential should not be left unused. 2nyway, new and inno ati e solutions must be in ented to answer the current market slump. Cutting down the marketing and ad ertising budgets will reduce the financial burden on retailing industry. Marketing and ad ertising are the supreme factors for the retail industry to penetrate more into retail market. &ollowing inno ati e marketing and effecti e ad ertising at low prices will be a brilliant mo e for the present day market trends. Challenge to get more customers at lo, cost(n this current meltdown, dri ing the customers to the retail stores seems high and dry. 6ut, the markets always ha e the hidden potential despite the slump. Today, the changing

market trends demand the retail industry to e1pand its reach to the more customer touch points so as to dri e them to the retail points. K>ow in estments and high returns0 is now made possible with the arri al of technology enabled marketing ser ices. The retail industry should reali3e that it would be at a fair ad antage of including technology enabled marketing ser ices to unfold the immense retailing opportunities. resent communication channel is ine!!ective and involves high costsThe present channel for customer communication is apparently ineffecti e which the retail industry has been following for the decades. Moreo er, it always in ol es high costs too. The outdated communication channels should be modified according to the changing market trends. *ow, an uninterrupted marketing channel, which will be continuously tied to the shoppers, is needed to boost up the retail industry. Eoing beyond the traditional marketing at low prices will cut down the high costs and brings good returns. /est alternative is $nline branding and mar+eting through e!!ective presenceNow it is the time to find the right alternative for the retail industry to bring down the expenses and to move up in the market. With the lacks of online searches, happening daily for the different products, online market is now creating enormous opportunities in retail business. To reach the online shoppers, online retailing is the best alternative solution for the retail industry, through which online branding can be achieved. Online branding and online marketing are the on going retail business trends.

Conclusion
CRM is basically the collection and distribution of 7all8 data to 7all8 areas of business. The data can then help market the company, help up sell to e1isting customer, understand customers better so that customers can be gi en better ser ice and allows them to interact with the company by whate er means they wish. Customer Relationships are achie ed by the whole company working together to gi e customers what they really want. CRM is a business strategy to create and sustain long! term, profitable customer relationships. Successful CRM initiati es start with a business philosophy that aligns company acti ities around customer needs. $nly then can CRM technology be used as it should be usedLas a critical enabling tool of the processes re'uired to turn strategy into business results. CRM is now an integral part of the business isionFstrategic roadmap of companies in irtually e ery industry domain and feeder!linked sectors. (t is the arious stages that lead to better understanding of all aspects of customer beha ior4 interface points, transactional issues and 7intangible8 benefits proffered that helps a company differentiate itself from others in terms of leadership and market dominance in a particular space. The 7?e Care8 principle has to be embedded in the ery itals of the organi3ation for long!term benefits to accrue and for 7delighted customers to keep coming back. Clearly, it is a matter of being in synch with customers0 changing needs that shapes business success stories. Companies that continuously align and re!align their brands, products and ser ices ha e a better chance of understanding their present as well as future consumers. Total customer orientation centered on customer understanding is bound to pro ide long! term customer alue and by inference superior company and shareholders alue in terms of sustainable growth and profits.

Customer Relationship Management is a prere'uisite for maneu er strategy as it pro ides customer information proacti ely for making swift mo es. ?hen there is a strong info! structure a ailable for the firm through greater access of customer information that can be manipulated with changing time and market dynamics, it allows the marketer to make calculated 9udgments as to where and when to mo e. Tools of customer relationship management like data warehousing help in reali3ing optimal results when the manager understands the strategic parado1. Customer Relationship Management helps in de eloping the most important competiti e ad antage in the form making the desired consumer information a ailable at the fingertips of the decision makers for taking optimum decisions. (t has been said that the most successful companies of the future won0t be the big ones4 they0ll be the fast ones. The power of the emergent social network will undoubtedly increase as global companies make their impact known, and you can bet that social networks will try to keep up with e en the fastest corporation. CRM applications will increasingly mimic the way our social en ironment works in the years ahead. &inally, concluding about CRM in the following points% 2 strategy defined around producing alue to fulfill business needs. 2 collaborati e business needs. 2 set of measurements that reflects how successful +or unsuccessful, the collaborati e alue chain has been in fulfilling customer0s needs and the ability to ad9ust the processes to impro e the rate of success. 2 system that pro ides insight into customers so that impro ements can be made. alue chain of all institutions and processes needed to fulfill

2ccess to all the ser ices customer need for news, information, purchases, business, deli ery, and on to infinity, from where er customer are in whate er circumstances

0uggestions
-. CRM dri en by the employees is most likely to succeed and hence CRM initiates should ideally come from front line employees who are indirectly related to the customers.2 Customer!Centric Muality Circle could be formed in organi3ations to facilitate this. A. Companies implementing CRM should keep in mind that CRM is not )atabase Management but a whole new way of looking at the business. G. CRM concept could be e1tended with the help of 6luetooth and J(*( with CRM enabled de ices who recommend self repairs and undertake self maintenance with the help of online technicians. B. The ad ent of GE mobiles and ?>> could help the companies keep a track of their customers and offer them not only customi3ed products and solutions but also customi3ed information and customi3ed ad ertising. H. &inally instead of 9ust launching products companies could well form customer groups who will work with the company to de elop a new product and will be rewarded for the same. Solution by MartJack for B2C success:!MartJack e!enabler platform is the ultimate result of the years long market research which can con9oin the online shoppers and the retail industry at technology enabled online stores. Building web stores for retailers with indi idual local online identity, MartJack allows retail industry to be open to the millions of online shoppers with complete product information, e1citing prices and tempting deal and offers. Today consumers need accurate information for making a purchase decisions and low cost product a ailability at nearest region, to finish

their shopping. art!ack built web stores will be the final point of their online search and your physical store will be the end point of their shopping. This could be the most efficient way for 6AC success.

/ibliograph*

Maga(ines
o 6usiness ?orld o 6usiness Today o 6usiness (ndia

1e,spapers o Times $f (ndia o &inancial =1press o =conomic Times Websites

o www.crmAday.com o www.salesforce.com o www.bitpipe.com o www.customerser icemanager.com o www.serachcrm.com o www.darwinmag.com o www.crmassist.com o www.google.co.in o www.yahoo.com

 Re!erence /oo+s
o CRM% Redefining Customer Relationship Management o ?hy CRM )oesn0t ?ork; o CRM% Eetting (t Right

Contents
12 re!ace 32Introduction 42 What is Customer Relationship Management? 52 urpose o! "sing CRM in Retail 72 %e* CRM principles 1 3 5 6 8

92 Advantages o! "sing CRM in Retail 62 #isadvantages 82 Retail Mar+eting in India is in Recession 92Conclusion 1020uggestion 112/ibliograph*

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