CUSTOMER

RELATIONSHIP
MANAGEMENT
By group IX
 Market has changed its focus from
product-centric to customer-centric.

 Customers have assumed the most

important position in the business
equation.
NEW AGE CUSTOMERS’ BEHAVIOUR
COMPANY’S PERSPECTIVE
Economics Of Customer Retention

“Winning back a lost customer can cost up to 50-100

times as much as keeping a current one satisfied.”
What is Customer
Relationship ?
Developing, maintaining and
sustaining a close bond between the
Customer and the Company.
What is CRM ?
Crm is a comprehensive strategy and
process of acquiring, retaining and
partnering with selective customers to
create superior value for the company
and the customer.
 The use of wide range of marketing, sales,
communication, service and customer care
approaches to :
 Identify a company’s customers
 Create a relationship between company &
customers
 Manage that relationship to the benefit of
both
 It is not a technology solution, it is a business
culture
Goal of CRM

 Providing services to customers keeping

their requirements and expectation in
mind
 Developing an effective system for
maintaining a contact between firm and
customers
 Mutual benefit of the customers and the
company.
Benefits of CRM

 Improved customer retention & loyalty

 It offers customers an insight into the
Company
 Establish personalized relationship with
customers to improve customer
satisfaction and maximize the firm’s profit
 The employees have the information
about their customers.
Requirements of CRM

 Good manufacturing/ operations & distribution

 Properly recruited, trained & motivated people
 Robust enquiry, sales & complaints handling
processes
 Good information technology ,so that the
company can recognize customers and provide
offers, information and advice
 CRM Components

 CRM’s can be broken down into three key

components.
Front Office
Interaction With Operations
Customers (sales,
(email, letters, Operational marketing,
phone, service etc)
meetings, fax
etc)

Enhance
Collaborative Analytical Company
Relationship
with Customer
Marketing Concepts of CRM
Capabilities of CRM
applications
 Sales force automation
 Customer Service: provide information to make call
centers, helpdesks and customer support staff
more efficient
 Targeted Marketing:
 cross selling (Saving account holder for a personal
loan)
 up selling (credit card companies may ask the
customer to upgrade from gold to platinum card)
 Bundling: combinational offer with a lower price
Does every business need
CRM?
Following business need CRM
 Businesses that can sell a variety of products
to the same customer.
 Businesses whose product get old and have to
replaced.
 Businesses whose product is continuously
upgraded.
 Businesses that have many VIP customers and
need to know a lot about them.
 Businesses that normally collect a great deal
of data in the course of their business.
There is no need of CRM for following Business.

 Businesses where the unit value is low

 Businesses where the CLV (Customer Life Cycle
value) is low
 Businesses with high churn
 Businesses where there is no direct contact
between the seller and ultimate buyer.
An example in Hospitality Industry

 Need to know about customer who use the hotel services

 Enable them to get same treatment across the chain of

hotels

 Speed up check-in and check-out

 Eg: CRM at Hilton hotels (check in 36hrs before actually

reaching the hotel, online checkout and expenses billed
to him electronically)
CRM in RBC

 Implementation of CRM
 Identify profitable customers
 Customized plans

Royal bank achieved a high response rate for

its campaign (30% compared to industry rate
of 3%) with the system
CRM in RBC
LOYALTY AND CUSTOMER
RETENTION
Loyalty
 Loyalty, in marketing, consists
of a consumer's commitment to
repurchase or otherwise
continue using the particular
brand and can be demonstrated
by repeated buying of a product
or service or other positive
behaviours such as word of
mouth advocacy.
Categorization of Loyalty

 Hardcore Loyals - who buy the brand all the

time.
 Softcore Loyals - loyal to two or three
brands.
 Shifting Loyalty - moving from one brand to
another.
 Switchers - with no loyalty (possibly 'deal-
prone’, looking for something different)
Customer Loyalty and
Satisfaction

Satisfactio Loyalty
n

About Past About future

Feeling Action
 Matrix between Customer Satisfaction and
Loyalty

Retrospect Leader
HIGH

Satisfaction

LOW
Lost Trapped

LOW HIGH
Loyalty
Advantages of Customer
Loyalty
 Reduced marketing expenditure
 Business Ambassadors
 Business growth
 Profitability
 • High Service • Entrepreneu
Component r
• Inertia
• High end of
value chain
• Multi-product • Emotional
• Differentiation • Rational
RESOURCES
SUPPLIER CULTURE TEHNOLOGY PRUDUCT/SERVICE ATTITUDE
HUMAN
LOYALTY DRIVERS
Drivers of Customer Loyalty
Loyalty Breakers

HIGH
EXPECTATION
S

NEW OPTIONS
CUSTOMER
DISSATSFACTION

CUSTOMER
ATTITUDE

LOYALTY BREAKERS
Customer Loyalty Management

 CLM means that you intelligently act on

customer feedback and allocate resources
based on insight into how loyal they are to
your company.
Customer Loyalty Management Practices

 After Sales Service and Support

 Cross-Selling

 Customer Churn management

 Customer Communication and Complaint Management

 Customer Segmentation and Differentiated Service Levels

 Rewards and Loyalty Programs

 Customer Retention
 Customer Retention is the activity that a selling
organization undertakes in order to reduce customer
defections.
 Customer retention is more than giving the customer what
they expect, it’s about exceeding their expectations so that
they become loyal advocates for a company’s brand.
 The key to customer retention is to offer continuous satisfaction to
customers.

A highly satisfied customer 

• Stay loyal and longer.

• Buys more as the companies introduces new products and upgrades

existing products.

• Pay less attention to competing brands and advertising and is less

sensitive to price.

• Offers product or service ideas to the company.

• Costs less to serve than making new customers because transactions

take place in a routine manner.
 Reasons for customer Switching

 Pricing (High price, unfair pricing, deceptive pricing)

 Inconvenience (Wait for service, wait for
appointment)
 Core service failure (Service mistakes, Billing errors)
 Service encounter failure (Uncaring, impolite,
unresponsive behavior)
 Response to service failure (Negative response, no
response, reluctant response)
 Competition (Found better service)
Levels of Customer Retention Strategies

 Financial Bonds
 Financial and Social Bonds
 Financial, Social and Structural bonds
 Strategies for Customer Retention

 Complaint Management
System
 Visibility
 Accessibility
 Responsiveness
 Customer-focused approach
 Accountability
 Continuous Improvement
 Service Recovery Strategies

Steps in an effective service recovery system

 Measure the costs of effective service recovery. It should

include the indirect cost also, when a customer departs
unhappily.
 Break customer silence and listen closely for complaints.
 Act fast.
 Train and empower employees.
 Close the customer feedback loop.

 
 Managing Customer Waiting

 The organization should analyze its operational

processes
 In case waiting cannot be avoided, a reservation
system can be used.
 If unexpected delays occur, explanation should
be given to the customer.
 Try to reduce pre-service waiting time by
transferring some of the pre-service waiting to
the service encounter phase.
Thank you