STRATEGIC CRM

Ali Abbas
Sidharth Sinha
Sudhakar Chougale
Sriguna UKS
Priyanka Sharma
Divya Gupta
Neha singh
•
•
 WHY CUSTOMER
RELATIONSHIP MANAGEMENT
CAME INTO EXISTENCE?
 TRANSACTIONAL MARKETING RELATIONSHIP
MARKETING

Interdependence
Relationship
Marketing
Relationship
Marketing

Collaborate
Conflict

Transactional
Marketing
Transactional
Marketing Independence

Independence
 CREATING AND MANAGING
CUSTOMER VALUE

Understand Creating Capturing Deliverin Sustainin

ing Customer Customer g g
Customer Value Value Customer Customer
Value Value Value

Product Continuous
Creating Created out of Creating ly
customer product Customer delivery and
channel innovating
insights engineering delight the market
and technology management
place
 STRATEGIC CRM

Strategic CRM is a complex set of activities that

together form the basis for a sustainable and hard
to imitate competitive advantage. It shapes
interactions between company and customers to allow
maximization of lifetime value of customers.

It is a useful tool to differentiate between

customers with respect to their economic value to
the firm as well as their expectations from the
firm.
 LEVELS OF RELATIONSHIP BONDS

Relationship management can occur at different levels & each successive levels
of strategy results in ties & binds the customer closer to the organization & helps
to increase the competitive advantage of the organization

Levels of Bonds

Financial Bond
Social Bond
Customization Bond
Structural Bond
 BONDS

•Integrated information service •Volum

•Joint investments e&
•Shared process & equipment frequen
cy
•Rewar
Structural Financial ds
•Bundli
Bond Bond ng &
cross
selling
•Stable
pricing
Customizatio
Mass customization Social
Customer intimacy n •Continuous relationship
bond
Innovation bond •Personal relationship
•Social bonds among
customers.
 CRM Moderators Goals
Strategie
s Heterogeneity
Resource immobility
Strategically
embedded-
customer
intimacy

si ness
e d bu e
p ro v
r ma nc
Im o
perf
Strategically
embedded-
operationally
excellent

Not
strategically
embedded-
tactical CRM
Ex-post
imitability
Ex-ante
imitability - Justin
Engelland T ’ 05
CRM strategies for success
Strategically Differentiation strategy
embedded- through customer knowledge/
customer relationships
intimacy

Strategically
embedded- Low cost strategy through
operationally streamlined operations
excellent Example: Dell

Tactical initiative to solve

Not a specific pain point
strategically Example: Nokia
embedded-
tactical CRM
 Success strategy depends
on resources
Moderators / Resou Examples
rces
Resources and skills involved with our CRM initiative
1.Heterogeneity are unique to our organization
Companies in our industry differ significantly in how
they use CRM

Employees, technology and resources involved with our CRM

2. Resource immobility initiative could have just as much success at a competitor
as they had at our company

Even if our competitors knew the details about our CRM

3. Ex-post initiative, our competitors would not be as successful
imitability implementing it

There is a first mover advantage in our industry with CRM.

4. Ex-ante Whoever does it first gains an advantage
imitability
 RELATIONSHIP MARKETING
( Peppers and Rogers Methodology )

Identify Differentiate
customer, by value then needs
individually and
address

Valuab
le
customer

Customize Interact
product, service or and remember
info
 The Value Chain

CU
Customer Value
Porfolio Customer Network Proposition Customer
Intimacy Development life cycle

ST
Analysis Development
management
Primary

OM
Stages

ER
Culture and Leadership

Procurement Processes

YT
LI
Human Resources management Processes

BI
Supporting

TA
Conditions IT/Data management Processes

I
OF
PR
Organization Design
 CUSTOMER LIFE CYCLE MANAGEMENT
Customer need Assessment and
acquisition

Customer Customer
retention development
and through
referrals
for new
CRM personalization
and
customers customization

Customer equity leverage

through cross selling and up
selling
 CUSTOMER LIFE TIME VALUE

Life time value is essentially the difference between customer marketing

(relational marketing) and product marketing.
The more sales a company makes to its original customers, the higher would
be the profit margins from those individual sales. In fact the percentage
of profit a company makes from its continued sales to its customer base
is consistently higher than the profit made on the original sale. Each
customer then delivers an income stream and the stream of profit far
exceeds the value of the original purchase. Income stream contribute cash
flows in terms of years for any single product.
To understand the life time value of an insurance policy holder, it is
defined as the present value of projected contributions expected from the
policy holder during the coming years towards the net income of the
organization. The company’s profitability in the long term would be the
result of two factors, the difference between acquisition allowance
developed using policy holders life time value, and policy owner
acqusition cost.
 REGAIN STRATEGIES

Customization

Differentiation strategy

“WoW” syndrome
 CUSTOMER RETENTION

1
Life (in yrs),
the consumer =
uses the brand 1 – Retention
Rate
x
Retention = α
( Satisfaction
α =) Minimum rate or
lowest value of
retention
FUTURE SIZE OF CUSTOMERS

n
Future Size
of Customers = Current Size ( 1 +
Growth)
 VALUE OF A CUSTOMER

Benefit Retention
Value of = =
a Customer Cost ( 1 – Retention )
+ i

where i = Discount
“MEN AND WOMEN DON’T THINK THE SAME


WAY,DON’T COMMUNICATE THE SAME

WAY,DON’T BUY FOR THE SAME
REASONS.”
“HE SIMPLY WANTS THE TRANSACTION TO

TAKE PLACE.SHE IS INTRESTED IN

CREATING A RELATIONSHIP. EVERY PLACE
WOMEN GO THEY MAKE CONNECTIONS.”

THANK YOU