| Customer Relationship Management Unit-3MSE Interesting facts i = “70% of CRM initiatives fail” ‘= Source: Cop Gemini Einst & Young = "90% of enterprises cannot show a positive return on CRM” = Source: MEIA Group = “75% of CRM Initiatives fall to substantially Impact the customer experience” = Source: Gartner~2. How to build an effective CRM strategy for your business = A fundamental change Is happening all around us: = Power is shitting from companies to customers. = Fomesier callsit the Age of the Custome: = “In this era, digitally-savvy customers would change the rules of business. creating an extraordinary opportunity for companies that could adapt, and creating an existential threat to those that could not." ® This has profound implications for businesses like yours. A welkthought-of customer relationship management (CRM) sirategy, therefore, is more important than ever in this new era.Asset Base How do we create awareness of what we offer to potential customers of value? How can we retain or win back customers of value? How do we do iciently? customers’ loyalty and value to us by developing our value to the customer? How do we develop the “CRM Strategy : Developing the Customer How do we acquire valuable customers who will value us?2) = With an effective CRM strategy, you get: Cem ieeaey a aac) Effective communication with customers Data-driven decision making Profitable sales cycle Improved accuracy in forecasting Tiersen Rema m e117 Sn A A A ASIMS WHAT IS A CRM STRATEGY AND WHY IS IT IMPORTANT? The concept of CRM strategy refers to practices that are focused on converting each prospect into a customer and retaining your customers by engaging them with personalized communication. To get fruitful results through your CRM strategy, it is important that you have all the verticals of your business on the same page. For example, if is important that your sales, marketing, support, and finance work fogether to execute your CRM strategy. An ideal CRM strategy focuses on decreasing the cost of customer acquisition and increasing the customer |ifetime value. Having an ideal customer relationship strategy provides amazing benefits that help your business increase profitability.oS On the other hand, the risks involved in the absence of an efficient CRM strategy are; Sn aed Tele Retro an rodeo em oreo) Missed opportunities fo sell, upsell, or cross-sell fo existing customers Inability to attract and retain new customers Tes igeR Reta oot ened eae Me T eee elicteyyTips to build an effective CRM strategy 1. Define a vision 2. Align your CRM strategy with your corporate strategy 3. Leverage and examine your existing data wisely 4. Plan your content strategy 5. Kick start communication channels 6. Find and leverage the best CRM software for your business ~2.TIPS TO BUILD AN EFFECTIVE CRM STRATEGY Define a vision Having a clear vision is an essential aspect of building « CRM strategy. Ask yourself what should be the end goal of your CRM strategy. Depending on your goals, you can track the progress of your team. For example, if your goal is to increase conversions, you can check metrics for website traffic, lead generation and conversion, etc. Ensure that the final objective of your CRM strategy incorporates what should be the future environment of your business keeping in mind customer experience and profitability. ~2- v ewMSE TIPS TO BUILD AN EFFECTIVE CRM STRATEGY Align your CRM strategy with your corporate strategy Businesses have corporate strategies that focus on doubling revenue growth or offering a unique customer experience. All these goals can be achieved by implementing an effective roadmap. However, “CRM strategy” is a complicated term. It's not an implementational framework but rather helps in achieving strategie goals such as increasing customer loyalty, reducing customer churn, etc, It is essential that your corporate strategy and CRM strategy complement each other. If your CRM software struggles to address these unique priorities, your business clso struggles to get increased user adoption and hardly becomes sustainable.MSE TIPS TO BUILD AN EFFECTIVE CRM STRATEGY Leverage and examine your existing data wisely It is essential that you map your customers’ journey by analyzing their buyer personas. Go deeper into the problems you faced while communicating with customers in the past. Segmenting customer journeys into various groups can help you identify unique customer differences and expectations. Your team can then prioritize these groups to initiate communication accordingly. For example, a separate set of email will be sent to repeat customers and customers who make large purchases.TIPS TO BUILD AN EFFECTIVE CRM STRATEGY Plan your content strategy Having an effective content plan plays an important rele in building a robust CRM strategy. Il’s essential that your content delivers a relevant message to your target audience and especially those who are central to making purchases. Write blogs that educate your audience and increase their ood to convert. Similarly, you also need to decide which channel should be used to deliver your message. Decide whether you will use social medic or communicate with your customers through email. Going through a few experimentations may help figure out the right content channel for you.TIPS TO BUILD AN EFFECTIVE CRM STRATEGY Kick start communication channels One of the main objectives of having a CRM strategy is to increase the effectiveness of your support channels. Doing so makes it easy for your customers to reach out to support if they encounter a problem. The best plan is to implement a live chat option on your website to let customers gel solutions for their queries quickly. Live chat not only enhances the customer support experience but also helps boost conversions. Similarly, you can also consider using social media channels to solve customers’ problems. Sere2IMsBy =o TIPS TO BUILD AN EFFECTIVE CRM STRATEGY Find and leverage the best CRM software for your business Businesses often make mistakes while choosing the right CRM software. I's important that you do good research about what CRM software would integrate properly with your business operations. You can also consider learning what CRM software your competitors are using. If you have shortlisted a few CRM solutions, it would be a good idea to visit their official forums and reviews and check the past experiences of other customers. Businesses use CRM software to incorporate their CRM strategy into thelr overall business plan and yield better results. A good CRM solution helps businesses manage rect marae ‘monitoring receives: 5 gz [amt | |= standards | Acausten Ellel, = > Gaaretate and Customer swateay ens S|] | | _ecroncoanmerce B le] cuattaive e Cie doce lore = Reaksard characteristics: Mobile commerce), So “omens | rm “it lo Data repository roan taco ea Wsystems: “Analysis tacks: ia = Infermation Management Process| THE STRATEGIC MODEL FOR CRM (PAYNE, 2006). The Strategy Development process is concerned with integrating the business strategy from the organization angle and the customer strategy as to how firm interact and choose their customers. The Value Creation process with the main purpose of identifying the value the firm can create for the customer and the value the organization can also benefit from. The Multichannel integration consists of all the virtucl and physical channels with which the firm plans to interact with, But the main thing here is that, regardless of the channel contact, the aim is to create an experience that is uniform and also common. The Information Management process consists of many different of data repository IT systems, back and front office applications and analytical tools. It is thus necessary to access the visibility of the system so the need for performance assessment process set in and it is concerned at the strategic monitoring can be used to determine customer satisfaction and standards. ~2-2IMsBy ‘A business absolutely devoted to Customer Service Excellence will have only one worry about profits. They will be embarrassingly large.” — Sir Henry Ford. bette Targelirg your Cuyleriers with CRM VALUE CHAIN MODELMSE 2. The CRM Value Chain Model = The value chain model of Customer Relationship Management (CRM) is a model that provides insights to businesses on how to develop and implement CRM strategies. It was developed by Francis Buttle in the year 2004 (Buttle 2004) = The main aim of this model is to integrate an organisation’s internal and external process to create value for the customer at a profit. = Furthermore, the model is applicable in both business-to-business (B2B) and business-io-customer (B2C) type of businesses of all sizes (Gummesson 2015).Primary Stages Supporting Conditions Customer — tomer Network Value Port ptimary DEVCAMERt Proposition the Analysis (SCOPE) Development Customer Lifecycle Leadership and Culture Data and information Technology People Processes Buttle, 2000>IMSE &. Primary stage of the value chain model ® The primary stage of the value chain consists of different processes Each of which has its own concepts and tools which help enable the use of the model. The primary stage helps to: = locate the customer, = understand their habits, ® interact to develop a relationship and, ® them to provide customer servicePRIMARY STAGE OF THE VALUE CHAIN MODEL - CUSTOMER PORTFOLIO ANALYSIS The identification of a customer is the prime responsibility of an organization as it helps establish the target audience and develop products and services. The customers to be identified are the ones who can ‘ add value fo the business and are the most desirable for a business to succeed, The analysis helps to create a profile of customers, their needs. Furthermore, it helps the business to strategize for effective interaction and help discover highly valued customers for a long-term relationship.PRIMARY STAGE OF THE VALUE CHAIN MODEL - CUSTOMER INTIMACY Once all the information about the customers is in hand, it is lime to engage with the customers and interact with the ones that cre most valuable, to know them and to provide them greater value than the competitors would, in order to retain them. The business needs to know its customers well if it wishes to retain them. This is done through collecting and mining data through various channels. All relevant data regarding a customer is provided at the point of contact in order to create a better relationship between a customer and the business. Customer Intimacy , IMS &.A PRIMARY STAGE OF THE VALUE CHAIN MODEL - NETWORK DEVELOPMENT The process of network development is slow and steady as it requires extensive interaction between the organization and the customers, at every step of the relationship. Moreover, the customer needs to be engaged at the pre-sales, sales and ar the post-sales stage.S IMS] PRIMARY STAGE OF THE VALUE CHAIN MODEL - VALUE PROPOSITION DEVELOPMENT Once a business has learned as much as they can about a customer and have made a decision about who they would prefer to serve, they can now identify and create sources of value for their chosen customers. This can be done by creating tailor-made offers and experiences that will meet all the requirements, preferences and expectations of the customer. 66 For isstance, Airtel, one ofthe lading telecommuniations provides in India, created an application wherein the customers can access all information related to their serviees, Customers can also cus subscription and service plans as per their needs. The custom: e their an also talk‘SH 2 PRIMARY STAGE OF THE VALUE CHAIN MODEL - MANAGE CUSTOMER LIFECYCLE Customers may not remain indefinitely loyal to a business. The lifecycle of a customer may include the time from which an individual Is a prospect to the time when the individual has become customer and left it. ‘THE 5 STAGES OF THE CUSTOMER LIFECYCLE On the other hand, in some cases, the customer might become interested in advocating the services and products of the company to their peer network. Furthermore, the company is always interested to convert the customer into its advocate, thus, helping in extending the lifecycle of a customer,2IMsBy | SECONDARY STAGE OF THE VALUE CHAIN MODEL Leadership and culture: Effective leadership helps to create a good business value proposition towards customer management. It prioritizes customer relationship management processes. Data and information technology: Today’s CRM processes are quite reliant on Information Technology and Data. The data helps in acquiring information related to customers’ needs. Information technology helps in analyzing the vast amount of data to develop value propositions. Also, customer information drives CRM and helps in strategizing new processes that might help to address the customers’ needs.2IMsBy | SECONDARY STAGE OF THE VALUE CHAIN MODEL “People or employees: They are the most important support structure of a business, as they interact with customers to understand the way CRM needs to work. They may include the sales staff, customer service staff, production staff or the delivery staff. “Processes: They include the tasks that the company needs fo follow to produce « product or service as understood through customer profiling and network analysis. If the company requires @ generic product or service, the process works to make it possible. On the other hand, if the customers are more centric towards personalized offerings, the processes help deliver the same on behalf of the organization.Strategy Development Process Strategy Development Process.| THE MCKINSEY 7-S MODEL Strategy: this is your organization's plan for building and maintaining a competitive advantage over its competitors. Structure: this is how your company is organized (how departments and teams are structured, including who reports to whom). Systems: the daily activities and procedures that staff use to get the job done. Shared Values: these are the core values of the organization and reflect its general work ethic. They were called “superordinate goals” when the model was first developed. Style: the style of leadership adopted. Stat : the employees and their general capabil s. : the actual skills and competencies of the organization's employees.(2 Action Points for Testing CRM Strategy 7 » * Examine each of the 7S. > » Identify the key success factors of each ‘S'. Fa >» * Asceriain the gap between the elements and the strategic fit. > SRS egg eRe Oke ar hig hola eros are aa Orem R en accel a AService Quality Quality in service product is not what you put into it, It is what the client or customer gets out of it. PETER F. DRUCKER2. Defining Services = ‘A service Is any activity or benefit that one party can offer to another, which is essentially intangible and does not result in the ownership of anything. Its production may or may not be tied to a physical product.’ ~ Koller, Armstrong, Saunders and Wong=o Intangibility } = Services are mainly infangible: Because they are performances rather than objects, precise manufacturing specifications concerning uniform quality can rarely be set Most services cannot be counted, measured, inventoried, tested and verified in advance of sale to assure quality. = Because of intangibility, the firm may find it difficult to understand how consumers perceive their services and evaluate service quality2. Variability/Heterogeneity ™ Services have relatively higher labour quotient hence are heterogeneous: Their performance often varies from producer to producer, from customer to customer, and from day to day. = Consistency of behaviour from service personnel (i.e. uniform quality] is difficult to assure (Bitner and Booms 1981) = eg: All burgers of a particular flavor at McDonald’s are almost identical. However, the same is not true of the service rendered by the same _ counter staff consecutively to two customers.~2. Perishability = Perishability: Services cannot be stored, saved, retuned or resold once they have been used. Once rendered to a customer the servic completely consumed and cannot be delivered fo another customer. = Eg: Services cannot be stored. A 100-room hotel that sells only 60 rooms on a given night can’t inventory 40 unused rooms and sell 140 rooms the nex! night Revenue lost from not selling the 40 rooms is gone forever. Because of service perishabiliy, aitines and some hotels charge guests holding guaranteed reservations when they fail to ative. ® Acustomer dissatisfied with the services of a barber cannot retum the service of the haircut thal was rendered fo him. At the most he may decide not to visit that particular barber in the future.2. Inseparability } ™ Service inseparability is defined as the inability of the service to be separated from its provider through its production or consumption. = An example of service inseparability would be hospitality services offered by a hotel that are impossible to separate from the hotel. This means that to enjoy the hospitality service offered, the client must go to the hotel where the services are offered. Hospitality services cannot be separated from the hotel providing the service,Defining Quality ™ According to the prevailing Japanese philosophy, quality is “zero defects - doing it right the first time”.@ MSE] ~2. Service Quality 1. Evaluation of service quality is more difficult as compared to good quality 2. Service quality performance 3. Service quality evaluations involve outcomes and processes is a comparison between expectation and a. Levels of material b. Facilities ¢. PersonnelTYPES OF SERVICE QUALITY Technical quality: What the customer receives as a result of interactions with the service firm (e.g. a meal in a restaurant, a bed in a hotel). Functional quality: How the customer receives the service; the expressive nature of the service delivery (e.g. courtesy, attentiveness, promptness).Table 3.2: Refined determinants of service quality Determinant Examples of evaluative criteria Relabiity Abiity to perform the promised service dependably and accurately Responsiveness Wilngness to help customers and provide prompt service Assurance Knowiedge and courtesy of employees and their abilty to convey trast and confidence Tangiilty ‘Appearance of physical facies, equipment, wien materals and personne! Empathy Caring, individualised attention the fm provides its customers ‘Source: Parasuraman et al. (1986:14-15)External Factors SERVQUAL Dimensions | | influencing expectation | ‘Tangibles ‘ J Expectation (Expected Reliability Service) . Perecived Service Responsiveness Gap 3 | p Quality ¥ Assurance Perception (Perceived Service) Empathy~o- | Examples of matched pars of tems in the SERVQUAL questionnaie Dimension | Samal expecations iter Sample perceptions em Vien exelent ephore companies poise fo do seeting by acetate, Rehaoility. CYZ company provides fs services at the promised time e030 ee re eaoness conte ou Tangbes | ceteeephre conpanes wire node not eubrert XYZ company has note ng enue. Empathy | Exceten tanks wl rave operating ours conver to customers ‘XYZ bank has convenient operaing hous Egos actor compan il np ee byt a Rasponsveness eee a 4 | xyzenpiyess ae necro but hep yooAdvantages of Service Quality ® Sustaining the customers’ confidence in a service provider's service delivery. = Maximizing a company’s profits = Attracting more new customers and increasing business with existing clients. = Reducing dissatisfied customers with fewer mistakes = Increasing customer satisfactionILLUSTRATION A leading Garage of the town was providing repair services to business and individual customers. A customer feels that the breaking system of his car afier servicing from the service centre got corrected but the sound while driving became louder. After the service has been provided, the customer is able to measure outcome quality by comparing the outcome against the specifications he provided to the service centre before the start of the service. In another case, a household customer complained about the tansmission services of a particular Direct To Home (DTH) service Operator. After the service is provided with, the particular household is able to measure the quality of the outcome by checking the final transmission.Managing Customer communications Ceiba ‘= = “oe~2- What is customer communications management? = Customer Communications Management Is a strategy for improving the creating, storage and delivery of an organization's outbound communications. which typically include notifications for billing and Payment and account renewals in addition to marketing materials. While the mojortty of these communications are directed towards customers, = CCM also manages cn organization's interactions with other stakeholders such as distributors, partners, suppliers and regulatory bodies.2] 2 Benefits of customer communications management yvryvvevy emeuel ets Rerisceeuten) re ee Real cnet ot ial Re Woh i Automated messaging Multi and cross-channel communications a easrol Ro gaa soto Peewee}a ~2- CCM vs. CRM CCM and CRM are often confused because they both focus on customer interactions. However, the two have some inherent differences. CRM, for example, has been around for a long time. CCM, on the other hand, is a relatively new concept.IMS] CCM vs. CRM A strategic approach to customer interactions improving Common CCM functions include providing omnichannel communications, i.e., using multiple communication channels, and integrations to improve the customer experience. CCM tasks can be keeping organizations updated about customer billing cycles, renewals, and similar important timelines. A. strategic approach customer interactions. to managing Common CRM _ functions — include managing different disciplines __like marketing and sales under one head to improve customer relationships. CRM tasks are more focused on contact, sales, and marketing management to understand and meet customer demands at various touch points. .CCM vs. CRM cm ee CCM solutions are more advanced than CRM solutions and mitigate many of their limitations. One such CRM limitation is the lack of focus on the quality of the content and communication delivered, which CCM covers with personalization. CCM improves CRM systems by ensuring the seamless creation, storage, and delivery of customer communications. CRM solutions help to increase productivity and efficiency, but there is no suitable framework to evaluate the quality of these services.