introduction of customer relationship

8/7/2019 Introduction of Customer Relationship

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NAME: APURVA RATHOD-21

AMIT TRIVEDI-22

SIDDESH PATHARE-23

SANA KHAN-24

GANESH MISHRA-25

VINIT SAWANT-26

ROLL NO:22

TOPIC: CUSTOMERRELATION SHIP IN


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ACKNOWLEDGEMENT

We are the student of T.Y.B.Com in financialMarket. We were given the project of How to Select

Mutual Fund for Investment by our Shraddha Bhome mam.

First, we thank our advisor MUNMAY mam for her

continuous support in the project. Mam was always there to

listen and give advice. She is responsible for involving us

in the project. She showed us different ways to approach aresearch problem and the needs to be persistent to

accomplish any goal. She bought out the good idea in us.

Without her encouragement and constant guidance we

could not have finish this project.

So the special thanks for MUNMAY Mam who is

most responsible for helping us to complete the project.

For reminding us that our research should always be

useful and serve good purpose for all humankind.


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Introduction of Customer Relationship Management

CRM stands for Customer Relationship Management. It is a

strategy used to learn more about customers' needs and behaviors in order to

develop stronger relationships with them. Good customer relationships are at

the heart of business success. Every business organization depends on

customers for sustenance, the question is how to create and maintain

customer satisfaction. Every business communicates with their clients in

many different ways, especially in our technology rich and information

based society. How we treat all of this information is where CRM plays a

key role.

CRM is a comprehensive strategy and process of acquiring,

retaining and partnering with selective customers to create superior value for

the company and the customers. CRM is not just a technology, but rather a

comprehensive approach to an organizations philosophy in dealing with its

customers. . The more useful way to think about CRM is as a strategic

process that will help you better understand your customers needs and how

you can meet those needs and enhance your bottom line at the same time.

This strategy depends on bringing together lots of pieces of information

about customers and market trends so you can sell and market your products

and services more effectively. A customer-centric strategy is created with

the intention of increasing both your customer satisfaction, and customer

loyalty. The more useful way to think about CRM is as a strategic process

that will help you better understand your customers needs and how you can

meet those needs and enhance your bottom line at the same time.


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CRM is a management approach or model that puts the customer

at the core of a companys processes and practices. It seeks to create,

develop and enhance relationships with carefully targeted customers to

maximize customer value, corporate profitability and in turn, shareholder

value. CRM helps companies improve the profitability of their interactions

with customers, while at the same time; makes the interactions appear

friendlier through individualization. The essence of CRM is to treat

individual customers individually.

CRM leverages information technology (IT) to implement

relationship- marketing strategies. Already customers are actively involved,

either directly or indirectly with production processes. They make

suggestions, they ask for smaller, brighter, easier-to-use products. It wont

be long before they become valuable CRM stakeholders. Customer

Relationship Marketing involves creating, maintaining and enhancing

profitable and long term relationship with valued customers. Companies arte

realizing that in competitive market it cost a lot more to attract newcustomers from the competitive than to keep current customers. CRM can be

a single strongest weapon to ensure that customer become and remain loyal.

Implementing CRM is non- negotiable in todays business world

whether your customers are internal or external. Customers or business

whether they connect with you electronically or face to face from across the

globe CRM is a ticket to success.


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History of CRM

According to Graham Hoskins the past history of Customer Relationship

Management developments spread acres four decades :

In 1960

In 1970

In 1980

In 1990

In 1960 :

The era of mass marketing, standardized products

were produced in large quantities in huge manufacturing set ups

and these products were sold to all the customers who wanted it

and were willing to pay for it. There was no distinction, there was

no segmentation or customization.

In 1970 :

It saw the beginning of segmentation, direct mall

campaigns and early telemarketing. The market consists of

customers who are divided into two groups based on some

common characteristics that they show say.

For example : An insurance company can divide customers on the

basis of age : 20-35, 35-50, 50-60 and 60 year and above. Then it

can ask these different groups to buy different insurance policies

that it sells. It can be done by sending letters (direct mail) a calling

up (telemarketing) the customers.


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In 1980 :

Niche marketing was popular where in a small group

of customers were offered customized service and products and

they were ready to pay a premium for it.

In 1990 Relationship Marketing :

This decade saw the explosion of telemarketing and

call centre, all set up to develop relationship with the customers.


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Definition of CRM

Definition of Customer Relationship Management :

1. The purpose of every business is to create customers. So, CRM is a

single strongest weapon which manager has to ensure that customers

become and remain loyal.

- By Peter Drucker

2. CRM is a philosophy and business strategy, supported by a system and

technology designed to improve human interaction in a business

environment.

- By Paul Greenberg

3. CRM aligns business process with customer strategies to build

customer loyalty and to increase profit overtime.

- By Rigby Reichheld and Schefter

4. CRM is a comprehensive approach for creating, maintaining, and

expanding customer relationships.

- By Shradhha Bhome.


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Significance of the words used in the definitions:

A. Comprehensive :

CRM does not belong to just sales of marketing. It is

not the sole responsibility of the customer service group or an IT team; i.e.

CRM must be a way of doing business that touches all the areas.

B. Approach :

An approach is broadly a way of treating or dealing

with something. CRM is a way of thinking about and dealing with the

customer relationship. We can also use the word strategy because

customer relationship management involves a clear plan. Thus, CRM is a

strategic.

C. Customer Relationship :

In todays world where we do business with

individuals or groups with whom we may never meet and hence much less

know in person-to-person sense. CRM is about creating the feel of comfort

in this high technology environment.


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.

MEANING OF CUSTOMER

A customer is someone who makes use of or services the product or services

of an individual or organization. The word customer, historically derives

from custom means habit. Thus, by definition a customer is someone

makes use of or receives the product or services. It may be a group or

individual who have the business relationship with the organization.


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In India, we have been neglecting customer the concept of customers

services. This concept was realized importance by our great leader

M.K.GANDHI,. According to him, a customer is:

Most important visitor in the premises

Not independent on us, but we as a company are dependant on him

Not an interruption in companies work

Purpose for companies existence

Given us an opportunity to services in the market.

A customer services is the provision of service to the customer before,

during and after the purchases. It is a service of activities designed to

enhance the level of customers satisfaction i.e. the feeling that a product or

services has met the expectation of customers.

Customer services may be provided by a person or by a automated means

i.e. self service with the help of internal sites. Although, customer services

inspire of being realized by our great leader still no attention was paid to

improve the quality services and care for the customers. However, foreign

countries have started raising the importance of it and so started


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implementing customer relationship management with computers, internets,

mobiles etc.


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CHANGING PERCEPTION OF CUSTOMER

The perception of a customer has drastically changed. Peter Drucker said

twenty five years ago, that the purpose of a business was to attract and retain

a customer. There has been a phenomenal change and paradigm shift

towards customer during the past five decades in the Indian context.

1961-1970 Servicing the customer

1971-1980 Satisfying the customer

1981-1990 Pleasing the customer

1991-2000 Delighting the customer

2001-beyond Relating the customer

Today the relationship between the banker and customer has come under

sharp focus both at the banker as well as at the customers ends. The

dominant questions, which are bothering the minds of banks management

today, are how to improve competitive advantages in almost the same,

however the battleground is service.

With the opening up of the economy and the consequent onset of fierce

competition, customers have stared wielding enormous power to decade the


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terms of the market has become quite palpable. As a marketing strategy the

seller, in revised scenario, has imbibe a change in outlook with his customer

to ensure his customers to ensure his loyalty.

Tom Peter has emphasized that listening to customers must become

everyones business. With most competitors moving even faster, the race

will go to those who listen and respond most intently. It helps to decipher

the moments of truth.

CHANGE IN OUTLOOK


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Perhaps this new outlook has triggered the concept of customer

relationship management [CRM], which warrants the following steps:

To look at customers as a separate entity and not as an object

A shift in emphasis from accounts orientation to customer orientation

To sensitize service providers i.e. staff members about the unique need of

each customer

To understand the need of every customer with the help of technology

Importance of CRM


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The level of competition is increasing in every industry in the last few

decades. More companies enter into every industry and that makes the

rivalry extremely high. You can hardly expect a monopoly industry in the

world today. Every company has to fight for their survival in the extreme

competitive situations. All companies are trying to innovate to satisfy their

customer and remain competitive in the market. Companies come up with

different strategies to find their way to outcome the rivals. But it is not that

easy as the competitors also attack them in the similar way. It becomes very

crucial for the managers to take the right decision for the organizations.

In this competition market organizations must show their commitment

on Customer relationship. In every business the main focus is the customers.

Whatever strategy the company make, the ultimate aim is to satisfy the

customers. Customers have various kind of demand. Companies must try to

understand that and try to fulfill it better than the rivals. Companies fail to

identify customer need can not able to sustain in the long run. Many case

studies of successful companies show the evidence of this argument. The

main reason of their downfall is the lack of understanding of customers

need. To remain competitive in the market you have to understand the

customers. You have to ensure a superior Customer relationship

Management.

Customer relationship is one of the major focusing points of the

companies these days. The successful accomplishment of vision required the

company to fulfill their objectives. It can be financial or strategic objective.

Both of the objectives are equally important for the companies. But it is

important for the organizations to realize that the successes in gaining

objectives are largely depending on the Management of the customers. If


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you can not ensure a high quality Customer relationship Management you

can not expectations the achievement of objectives according to your plan.

That is why it is becoming so important for the companies to focus highly on

Customer relationship Management.

SIGNIFICANCE OF CUSTOMER RELATINSHIP

MARKETING


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To understand customer relationship marketing, we must review the

process involved in attracting and keeping customers. Figure 1.5 shows the

main steps in the customer development process. The starting point is

suspects, everyone who might conceivably buy the product or service. The

company looks hard at the suspects to determine who are the most likely

prospects- the people who have a strong potential interest in the product and

the ability to pay for it. Disqualified prospects are those the company rejects

because they have poor credit or would be unprofitable. The company hopes

to converts many of its qualified prospects into first time customers. Both

first time and repeat customers may continue to buy from competitors as

well. The company then acts to converts repeats customers into clients

people whom the company treats very specially and knowledgeably. The

next challenge is to turn clients into members, by starting a membership

programmed that offers a whole set of benefits to customers who join.

Hopefully then, the members will turn into advocates, customers who

enthusiastically recommend the company and its products services to others.

The ultimate challenge is to turn advocates into partners, where the customer

and the company work together actively.

Some customers will inevitably become inactive or drop out for

reasons for bankruptcy, moves to other locations, dissatisfaction, and so on.

Here the companys challenge is to reactivate dissatisfied customers through

customer win-back strategies. It is often easier to re-attract ex-customers,

because the company knows their names and histories, than to find new

ones.

Developing more loyal customers increase revenue. However, the

company has to spend more to build greater customer loyalty. How much

should a company invest in relationship building, so that the costs do not


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exceed the gains? We need to distinguish five different level of investment

in customer- relationship building:

The Customer Development


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1. Basic marketing:

The salesperson simply sells the product.


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2. reactive marketing:

The salesperson sell the product and encourages the

customers to call if he or she has questions, comments, or

complaints.

3. Accountable marketing:

The salesperson phones the customer a short time

after the sale to check whether the product is meeting expectations.

The salesperson also asks the customer for any product or service

improvement suggestion and any specific disappoints. This

information helps the company continuously improve its

performance.

4. proactive marketing:

The company salesperson contact the customer from

time to time with suggestions about improved product uses or

helpful new products(Kraft USA Sales reps used to limit their

customer efforts to devising promotions in supermarkets; now they

are more proactive, offering research and tips for improving a

stores profits)

5. partnership marketing :

The company works continuously with the customer to

discover ways to perform better.(general electric has stationed


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some of its engineers full time at Praxair,, inc. to help boost

Praxairs productivity.

Types of CRM


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There are following types of CRM :

Operational CRM

Collaborative CRM

Analytical CRM

Operational CRM :

I. This is an segment of CRM.

II. Typical business functions involving customer service, order

management, invoice or billing or sales and marketing automation and

management are the parts of Operational CRM.

III. It provides support to Front Office business processes including

sales, marketing and service.

IV. Each Interactions with customers are generally stored in customers'

contact histories, and staff can retrieve customer information as

necessary.

V. One of the main benefits of this contact history is that customers can

interact with different people or different contact channels in a

company over time without having to describe the history of their

interaction each time.

VI. Till now, this is the primary use of CRM. One characteristic of

Operational CRM is the possibility with the financial and human

resources functions of ERP applications.

Collaborative CRM :


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I. It is the communication center, coordination network that provides

neural paths to customer and its suppliers.

II. It could mean a Partner Relationship Management (PRM) application

or a customer interaction center.

III. It could mean communication channels such as web or e-mail, voice

applications and even channels strategies.

IV. In other words, it is any CRM function that provides a point of

interaction between customer and the channel itself.

Analytical CRM :

I. Analytical CRM is the capture, storage, extraction processing,

interpretation and recording customer data to user.

II. Companies such as Micro Strategy have developed applications that

can capture this customer data from multiple resources and then use

hundreds of algorithms to analyze and interpret the data as needed.

III. The value of application is not just in algorithm and storage, but also

in ability to individually personalize the response using the data.

IV. It generally makes heavy use of data mining.

V. It analyzes customer data for the following purposes.

Design and execution of specific customer campaigns.

Analysis of customer behavior to aid product and service

decision-making such as pricing etc.

Aid in taking management decisions such as financial

forecasting.


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Provide a tool in predicting the probability of customer

defection.

Benefits of using CRM


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According to M Dadlani, R. Shanker and P. Chopra every time a

company interacts with a customer, the company customizes its service

more closely suited to the customers needs. This means creating a profile of

desirable customers, developing marketing and sales campaigns to reach

those prospects, and maintaining your best customers to increase the lifeline

value of the relationship.

In short, CRM should provide the benefit of

Selling to your best prospects, and

Retaining your best customers for

Improving the profitability of your institution

The Company is getting a little higher up on the customers

learning curve to create this kind of learning the three some (M

Dadlani.R.Shanker and P.Chopra) suggest three criteria.

It is necessary to have a good design interface.

It Should have a good memory The company has to remember whatthe customer told them. Every interaction has to captured.

The Company has to have the ability to integrate the information into

the way it handles the customer .

It has to be easier for a customer to give a company its information.

As a side benefit, Customer Relationship Management systems helps the

bank present a consistent view of the customer relationship management

across all delivery channels. The recent success of Online Banking, Online

Investment programs, Direct selling of goods, Insurance, etc.

Electronic CRM


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Electronic Customer Relationship Management (E-CRM) has become

the latest paradigm in the world of Customer Relationship Management.

E_CRM is becoming more and more necessary as businesses take to the

web. No longer can web-enabled companies rely on the traditional brick and

mortar strategies that have gotten them to where they are today.

E-CRM is fast emerging as an effective Customer Relationship

Management strategy; it originated from the cal- centers and found its

natural habitat on the World Wide Web ( WWW). An effective E-CRM

model makes a judicious use through E-mail, chatting, call centers etc. The

rules of the game have changed for CRM. Customer demand for increased

value, greater convenience, and more control over products and services,

along with heightened pressure from competitors, have increased customer

acquisition costs and decreased customer and brand loyalty. At the same

time, advancements in technology have enabled the cost-effective

distribution of huge amounts of customer data, the delivery of customized

products, and the efficient use of interactive channels.

These technology developments are creating major opportunities to

collect and use customer information to gain a better understanding of

customer needs and to strengthen customer relationships. To take advantage

of these opportunities and address the escalating demands of customers,

companies are shifting the focus of their efforts to adopt a customer-centric

approach. Product excellence, innovation, and operational efficiency are still

important; however, successful companies are building on these existing

business strengths as they shift their attention to their customers.


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Channels, through which companies can communicate with its

customers, are growing by the days, and as a result, getting their time and

attention has turned into a major challenge. One of the reasons E-CRM is so

popular nowadays is that digital channels can create unique and positive

experiences- not just transactions- for customers. An extreme, but ever

growing in popularism.

For example : the tools used in E-CRM is the personalized Web pages

where customers are recognized and their preferences are shown.

Features of E-CRM :

1. Meet the needs of your mobile customers.

2. Ensure timely delivery of messages.

3. Increase overall consistency of customer communication, improve

program result and reduce errors.

4. Create highly targeted campaigns.

5. Monitor campaign activity in real time.

6. Prompt replies to customer queries.

7. Improve customer service.

8. Improve customer relationships with personalized, relevant

communications.

9. Efficiently manage customer interactions across multiple

channels( web, wireless, e-mail)

10. React to customer behaviors , preferences or requests as they change

over time.

11.One- to- one communication of outbound communications.

12.communicate with customers through their preferred channel.


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13.Increase response rates by distributing highly targeted messages.

14.Pre-determined message templates save you time by dynamically

populating message content.

15.Provide talent, one-to-one, personalized offers for individual

customers.

SIX ES IN E- CRM

The business types must address the six es in e-CRM to optimize the

value of relationship between companies and their customers. They are:

(1) Electronic.

(2) Enterprise.

(3) Empowerment.

(4) Economics.

(5) Evaluation.

(6) External information.

(1)ELECTRONIC:

New electronic channels such as the web and personalized e-messaging

have become the medium for fast, interactive and economic customer

communication, challenging companies to keep pace with this increased

velocity.


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(2) ENTERPRISE:

Through e-CRM, a company gains the means to touch

and shape a customers experience across the entire organization, reaching

beyond just the bounds of marketing to sales, services and corner offices

whose occupants need to understand and assess customer behavior. It relies

heavily on the construction and maintenance of a data warehouse that

provides consolidated detailed views of individual customers, cross channel

customer behavior and communications history.

(3) EMPOWERMENT:

E-CRM strategies must be structured to accommodate

consumers, who now have the power to decide when and how to

communicate with the company and through which channel. With the ability

to opt out; consumers decide which firms earn the privilege. In light of this

new consumer empowerment, an e-CRM solution must be structured to

deliver timely, pertinent, valuable information that a consumer accepts in

exchange for his or her attention.

(4) ECONOMICS:

Too many companies execute customer communication

strategies with little effort or ability to understand the economics of

customer relationship and channel delivery choices. Yet, customer

economics drives smarts asset allocation decisions, directing dollars and

efforts at individuals likely to provide the greatest return on customer

communication initiatives.


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(5) EVALUATION:

Understanding customer economics relies on a companys

ability to attribute customer behavior to marketing programs, evaluate

customer interactions along various customer touch point channels, and

compare anticipated ROI (rate of investment) against actual returns through

customer

Analytic reporting. Evaluation of results allows companies to continuously

refine and improve efforts to optimize relationships between companies and

their customers.

(6) ETERNAL INFORMATION:

The use of consumer sanctioned external information can be

employed to further understand customer needs. This information can be

gained from such sources as third arty information networks and web page

profiler applications, under the condition that companies adhere to strict

consumer opt in rules and privacy concerns.


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SIMILARITIES BETWEEN CRM AND E-CRM

As the customer relationship revolution moves on, companies are willing

to find better ways in dealing with customers. CRM and E-CRM offer these

opportunities to provide values added relationships. The tables below

identify some of the CRM and E-CRM similarities. It is important for a

company to review their business model and then choose the direction of

traditional CRM or the E-CRM.

Characteristics CRM& E-CRM

Objectives They make the companies closer to the customers.

Level of interaction They provide the best interaction between

marketing, sales, services and supports.

Media The communication medias are phone, web, email,

fax mail etc.Usage They eliminate and reduce the disconnections

between customer and company relationship.

focus They both improve upon reality and perception of

personalization.


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Components of E-CRM:

(1) E- CRM ASSESSMENT:

It is very important to devise numerical measures of how a company

measures up in the eyes of the customers with respect to its competitors. An

e-CRM capability index is devised which proved a benchmark for cross

company comparison. Based on these results, a company identifies quick

hits, which can be immediately implemented to improve business processes;

impact the bottom line and future enhance its understanding of its

customers view of the company.

(2) E-CRM STRATEGY ALIGNMENT:

Each company must identify measures and align to the gaps that exist

between customer expectation already measured in the e-CRM assessment

stage and the internal capabilities that serve these customer expectations.

(3) E CRM ARCHITECTURE:

During this stage, the company will try and develop a CEA

(connected enterprise architecture within the contest of the companys own

customer relationship management strategy. The following is a set of

technical E-CRM

Capabilities and applications that collectively and ideally comprise a full E-

CRM capabilities and application that collectively and ideally comprise a

full E-CRM solution.

CUSTOMER ANALYTIC SOFTWARE:


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It should integrate with customer communications software to

enable companies to transform customer finding into ROI (return

on investment) producing initiatives.

DATA MINING SOFTWARE:

The predictive modeling it does must be tightly integrated with

campaign management software to keep pace with multiple

campaigns running daily or weekly.

CAMPAIGN MANAGEMENT SOFTWARE :

The software tests various offers against control groups, capture

promotion history for each customer and prospect and producesoutput for virtually any online or offline customer touch point

channel.

BUSINESS SIMULATION:

It is used in conjunction with campaign management software,

Optimizes offer, messaging and channel delivery prior to the

execution of campaign and compares planned costs and ROI

projections with actual result.

REAL TIME DECISION ENGINE :

It coordinates and synchronizes communications across duplicate

customer touch points system. It contains business intelligence to

determine and communicate the most appropriate massage offer and

channel delivery in real time and support two-way dialogue with

customer.

Strategy of CRM


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Several CRM software packages are available, and they vary in their

approach to CRM. However, as mentioned above, CRM is not just a

technology but rather a comprehensive, customer-centric approach to an

organization's philosophy of dealing with its customers. This includes

policies and processes, front-of-house customer service, employee training,

marketing, systems and information management. Hence, it is important that

any CRM implementation considerations stretch beyond technology toward

the broader organizational requirements.

The objectives of a CRM strategy must consider a companys

specific situation and its customers' needs and expectations. Information

gained through CRM initiatives can support the development of marketing

strategy by developing the organization's knowledge in areas such as

identifying customer segments, improving customer retention, improving

product offerings (by better understanding customer needs), and by

identifying the organization's most profitable customers.[9]

CRM strategies can vary in size, complexity, and scope. Some

companies consider a CRM strategy only to focus on the management of a

team of salespeople. However, other CRM strategies can cover customer

interaction across the entire organization. Many commercial CRM software

packages provide features that serve the sales, marketing, event

management, project management, and finance industries.

From this perspective, CRM has for some time been seen to play an

important role in many sales process engineering efforts.

Technological aspects of CRM
http://en.wikipedia.org/wiki/Customer_servicehttp://en.wikipedia.org/wiki/Retentionhttp://en.wikipedia.org/wiki/Customer_relationship_management#cite_note-crmunplugged-8%23cite_note-crmunplugged-8http://en.wikipedia.org/wiki/Sales_process_engineeringhttp://en.wikipedia.org/wiki/Customer_servicehttp://en.wikipedia.org/wiki/Retentionhttp://en.wikipedia.org/wiki/Customer_relationship_management#cite_note-crmunplugged-8%23cite_note-crmunplugged-8http://en.wikipedia.org/wiki/Sales_process_engineering


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STEPS BEFORE IMPLEMENTING CRM:

BEFORE:

Implementing CRM certain basic steps with analysis should be

followed. This analysis will help the users to identify various plans and the

methods for implementation.

Implementation of CRM

BUSINESS OBJECTIVES:

Busine

ss

Object

Program

Initiatives

Departmental plans

Technology


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Each and every business with have its own objectives with which it will

be started with. In the process of the organization those objective will achieved

in a step by step manner. In the context this phase in the implementation will

described the initial short term plans. The scope of this step with planning can

only lead towards the long term objectives. This includes the revenue, market

share margins and other initial investments. The main aim to designing this step

is to make the organization as customer centric company.

PROGRAM INITIATIVES:

This is the second step toward the implementation of CRM. This phase

will concentrate with 1 to 1 years in scope. This takes one step forward to the

long term plans. This will focus on the customers satisfaction. This phase will

create the clear plans for the future progress to achieve the long term goals. The

step will improve the customer satisfaction at least by points.

DEPARTMENTAL PLANS:

This is one step further after the definition of the organization objectives.

This will prepare everyday plans to help the organization in achieving long term

goals. This will deploy the plans by arranging E-mail system and call centers.

These departmental and as a whole the integration will be made and the overall

optimized implementation will be achieved.

TECHNOLOGY:

The technology is the main driver in the entire architecture by which the

entire planning phase will be successfully managed and the prime objective will

be achieved. This technology part is implemented by preparing various modules


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for the various activities likes sales, marketing, etc. these technical things will

be discussed in detail with the other units in this book.

Organization tend to execute their technology strategies in one of the four

stages which are indicative of how coordinated the organization from top to

bottom and side to side and how effectively and efficiently it is executed.

Stages after implementation of CRM

Todays dynamic business environment calls for flexible strategies and

decisions for organizations. The same is true for individuals and customers.

The changing personal, social and economic landscape influences consumer

requirements. Thus consumers need access to products and services anytime.

The technology part is implemented by preparing various modules for the

various activities like sales, marketing etc.

Organization tend to execute their technology strategies in one of the

four stages which are indicate of how coordinated the organization from top

to bottom and side to side and how effectively and efficiency it is executed.

The stages of technology implementation are :

a. Functional CRM

b. Departmental CRM

c. Partial CRM

d. Full CRM

Functional CRM :

This model of implementation is possible only with the large scale

organizations which will not be having any for departmental coordination.

These models will work only for the particular departments. This can be


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called as specialized models. Return On Investment (ROI). This method

will benefit only to the specific area not to the entire organization.

Departmental CRM :

This model is possible for all size of organizations. There will be

some departments which will be common for one or more business modules.

This departmental coordination can be utilized and the models can be

implemented accordingly. This will give success from bottom line to the

middle level. These means these models can help the models like call

centers etc. Partial CRM :

This models is possible only when the departmental coordination is

more among the departments. In this model two or three departments will be

sharing a common master database. As the models are shared among the

various business processes the return on the investment will be always 4 to 7

times higher than the initial investment.

Full CRM :

This model is applicable with all levels of organizations. In this

model the entire organization will be using a same database. There will be

grater coordination among the departments with this type of organization. As

a whole the implementation is done. Because of this common nature, this

model provides a grater ROI which is 7 to 10 times greater than initial

investment.

As mentioned above each and every organization will have its own

working method. By identifying their level in any of the above mention

models, the organization can proceed with the implementation.


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CUSTOMER INTELLIGENCE

This is another name for customer facing system. This creates the

strong base of data about the customers that the organization is having with

itself. Any organization which is having good customer intelligence can

create a best customer data repository with which the retention of customer

will be easy for the organization.

Action

FormulateStrategy

Analysis

Data

Gather

customer

Data


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1.13.1 Customer Intelligence Diagram

The customer intelligence is having above mentioned four steps that is

to be followed. Each and every step is interrelated with each other.

1. GATHER DATA:

Data collection.

Various sources are considered.

Various touch points are accessed.

Various parameters are considered.

Data will be accumulated in a single repository.

2. ANALYSE THE DATA:

Patterns are to be designed for the analysis.

Detailed analysis will be performed.

Samples will be taken into consideration.

Final formulation will be done.

3. FORMATION STRATEGY:

Conclusions will be derived from the analysis.

Data segmentation will be done.

Models will be prepared.


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4. ACTION:

The final step in the customer intelligence.

Actions will be taken based on the strategies planned.

Final repository will be stored with the plans.

Any organization which is following the above mentioned steps can

create a good customer data repository.

CRM Solution Map :

Marketing Sales

(targeting (business

Prospects with good

And knowledge

Acquiring managementNew tools)

Customer)

Service E-commerce

(handing (quick

CRM

SOLUTION

MAP


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Post transaction with

Sales low cost)

Service)

CRM TECHNOLOGY COMPONENTS:

The following are the components. Which are common to different

CRM approaches.

CRM ENGINE:

This could be the customer data repository. The data mart. The data

warehouse is the one where all the data basic stuff such as your name.

address, telephone number birth date etc. it could also include more

sophisticated information like how many times you have accessed a

particular wed site and what you did on the wed pages you accessed. It could

also include the help desk support and the purchase history. Ultimately, the

purpose is a single gathering point for all individual customer information so

that a unified customer view can be created throughout the company

departments that need to know the date stored in this CRM engine house.

FRONT OFFICE SOLUTIONS :

These are the unified applications that run on the top of the customer data

warehouse. They could be sales force automations. Marketing automation.

Or service and support customer interaction applications. In the client server

environment (and now in the internet environment), they provide employeeswith the information on the basis of which thee decision of what is to be

done? or what next is to be done with the customer? is made. The more

specific applications provide an element of self-service for the customer.


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ENTERPRISE APPLICATION INTEGRATION:

They sit between back office and front office. They also sit between the

newly installed CRM system and old systems implemented by the

enterprise. They permit CRM to CRM communication. They are pieces of

codes, connectors and bridges that as a body are called as EAIs. EAIs

provide messaging services and data mapping services that allow one

systems regardless of their formatting.


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KEY INGREDIENTS FOR SUCCESSFUL RELATIONSHIP


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CRM In Central Bank

CRM stands for Customer Relationship Management. It is a

strategy used to learn more about customers' needs and behaviors in order to

develop stronger relationships with them. Good customer relationships are at

the heart of business success. There are many technological components to

CRM, but thinking about CRM in primarily technological terms is amistake. The more useful way to think about CRM is as a strategic process

that will help you better understand your customers needs and how you can

meet those needs and enhance your bottom line at the same time. This

strategy depends on bringing together lots of pieces of information about

customers and market trends so you can sell and market your products and

services more effectively.

CRM acts as a central repository of information on your clients and

potential clients. Customer relationship management software hones in on

the relationship. In todays competitive market driven economy it is not only

sufficient to provide your customers with the best service levels and

customer experience over the short-term, but also analyze the transactional

information to develop better services and products for your customer over

the long run through the discovery of not-so-obvious insights into customers

wants and needs.


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Central Bank of India is one of the largest banks in India. Established

in 1911, it was the first Indian commercial bank to be wholly owned and

managed by Indians. Sir Sorabji Pochkhanawala, founder of the Bank

proudly declared on its establishment that Central Bank was the 'property of

the nation and the country's asset.' The bank's customer base of 25 million is

among the largest in the industry and it has 3115 branches spread across the

vast geography of India. Progressive management and far-sighted leadership

have ensured that the bank has maintained its status as an asset for the

country.

Central bank of India is one of 18 Public Sector banks in India to get

recapitalization finance from the government over the next 24 months. The

infusion of fund will improve the financial health of the banks as their

capital adequacy ratio (CAR) will be raised more than desired level of 12

percent. The increase in CAR of the banks will also enable them to lend

more money. The CAR of Central Bank of India was less than 12 percent as

on June 30 2006.

The wholly-owned public sector bank, based in Mumbai, will convert an

amount of Rs. 800 crores out of its Rs. 1,124.14-crore total equity capital

into perpetual non-cumulative preference shares. The preference shares

would carry an annual floating coupon rate of eight per cent, which would

be benchmarked to 100 basis points above the repo rate. It will shore up the

balance-sheet of the bank and enable it to raise capital from the markets.


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CRM IN Banking Sector

A Relationship-based Marketing approach has the following benefits: -

Over time, retail bank customers tend to increase their holding of the

other products from across the range of financial products / services

Long-term customers are more likely to become a referral source.

The longer a relationship continues, the better a bank can understand the

customer and his/her needs & preferences, and so greater the opportunity to

tailor products and services and cross-sell the product / service range.

Customers in long-term relationships are more comfortable with the

service, the organization, methods and procedures. This helps reduce

operating cost and costs arising out of customer error.

With increased number of banks, products and services and practically

nil switching costs, customers are easily switching banks whenever they find

better services and products. Banks are finding it tough to get new

customers, and more importantly, retain existing customers.

According to a research by Reichheld and Sasser in the Harvard

Business Review, 5% increase in customer retention can increase

profitability by 35% in banking business, 50% in insurance and brokerage,

and 125% in the consumer credit card market. Therefore, banks are now

stressing on retaining customers and increasing market share.


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Customer Relationship Management (CRM) refers to the methodologies

and tools that help businesses manage customer relationships in an

organized way.

For small businesses, customer relationship management includes:

- CRM processes that help identify and target their best customers, generate

quality sales leads, and plan and implement marketing campaigns with clear

goals and objectives;

- CRM processes that help form individualized relationships with customers

(to improve customer satisfaction) and provide the highest level of customer

service to the most profitable customers;

- CRM processes that provide employees with the information they need to

know their customers' wants and needs, and build relationships between the

company and its customers.

Customer relationship management tools include software and browser-

based applications that collect and organize information about customers.

For instance, as part of their CRM strategy, a business might use a database

of customer information to help construct a customer satisfaction survey, or

d Through more than a decade of work in this area, Accenture has identified

six key insights that enable companies to obtain a more accurate reading oftheir most valued customers:

Current value-how valuable is this customer to the organization

right now?


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Share-of-customer-how much of the customers financial services

activity is with this organization?

Future valuehow valuable is the customer likely to become in the

future, as life stage and wealth change?

Best next productwhich is the next best product or service for this

customer, the one that will increase value for the customer and the

organization?

Attrition riskhow likely is the customer to leave?

Channel preferenceshow does this customer prefer to receive

communications and services?

In a typical bank, one-third of the customers may account for nearly all of

the profits, while subsidizing a substantial number of unprofitable

relationships. By understanding which customers to target and with what

offerings and communications, financial services companies can ultimately

make more intelligent marketing decisions and allocate resources to

maximize profitability across the customer base.

By building intelligence from customer insight, financial services

companies stand to reap the benefits of:

Predicting what customers need and want on a more personalized

level.

Understanding how much should be invested at the individual

customer level.

Understanding how to cost-effectively allocate marketing, sales and

service resources.

Measuring the effectiveness of resource allocation decisions.


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Driving intelligent decision-making across channels and contact

points.

Aligning value delivered to customers with value generated from

customer relationships.

But even if sales and service efforts are tiered based on customer

potential and preferences, will competitive pressures demand a level and

sophistication of customer contact that rapidly becomes cost prohibitive?

How realistic is it to assume that Best Bank Inc. will ever be able to

effectively monitor Claire or Peters desires or keep pace with their

expectations?

As they look to the future, financial services companies will find

themselves grappling with how to build on their CRM capabilities to

accommodate an ongoing increase in the standard of excellence in customer

management. Todays customers dont sit still, let alone tomorrows. As

resources are stretched to new limits, the costs to attract and retain customers

will continue to rise and banks will be forced to rethink how they can

leverage the investments in CRM capabilities and infrastructure.

4.2.1 Private Banking and CRM

Private Banks have traditionally viewed themselves as exceedingly

'Customer Centric' offering what they believe to be highly personalized

services to the High Net Worth Customers. However, changes in the

customer behavior and accumulation of wealth are resulting in the needs of

HNW customers becoming more diverse and complex in terms of the sorts

of products they want, the channels through which they want to access them

and the associated range of advice.


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The wealthier the customers, the more demanding they are - and the

clients expect more and more from their banks. Competition for "Supremely

elite" is increasing .

Customer Experiences

The first step towards successfully winning, retaining and growing the

profitability of private banking customers is to understand what their wants

and needs are, so that the organization can be built around serving those

needs. Only when an organization has done this and incorporated this into its

strategy can it start to design its value proposition and a customer experience

that will enable it to achieve a differentiated competitive position in the

private banking market, and more importantly, do so in an economically

viable way.

4.2.1:1The Basic Customer Experience


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There is a basic 'generic' customer experience that many private banking

customers are seeking. To be a credible player in the market, a private bank

must be able to deliver this 'base' experience. This represents a common set

of needs that are shared by most HNW customers. Therefore, the private

bank must have the capabilities required to meet these needs for the majority

of its customer base.

All customers, regardless of wealth levels, have similar emotional

needs, which drive their need for advice and their purchase of products.

Different wealth levels impose different priorities on meeting these needs

and open up new avenues for doing so.

Take a simple example, HNW customers can afford on it to fund their

retirement, so their priorities may be associated with growing wealth, rather

than preserving it, allowing them to choose a product option with a higher

risk/reward ratio.

If this is true, it means all HNW customers start with a basic, common

set of what they want and need from a bank, which might include: -

Personal, long-term relationship

Advice combining industry expertise and knowledge of personal

circumstances

High quality, consistent quality

Security, privacy, confidentiality


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At this basic level, grouping together these core wants and needs

produces a set of generic characteristics that an HNW individual seeks from

an organization before he or she will even consider placing any of his or her

wealth with it.

Underlying these generic characteristics is a set of capabilities covering

organization, process and technology, which the private bank must process

to operate in the high net worth market.

The Segment-Specific Experience

To build this 'base' experience, private banks also need to consider the

segment-specific needs of their target customers. This in itself requires a

capability to identify and justify target customers and understand their needs

beyond banking, to ensure that their emotional needs are met. It is here that

the customer is made to feel like an individual, but it is also at this point that

costs and infrastructure spiral, as customers' needs start to diverge.

4.2.1: 2 Segment Specific Experience


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The segmentation process identifies groups of customers with similar

wants and needs, who are seeking a similar experience from the provider.

Importantly, from the organizations' viewpoint, this means that they can also

be served by similar sets of capabilities.

The experience at this level is made up of: -

The channel preferences of each segment and associated channel

experience - for example, a self-directed group of customers will use internet

for transacting, information gathering and even some advice, whereas advice

seekers and less financially sophisticated segments require more access to anadviser / relationship manager and a more basic experience over the Internet.

The product and service preferences of that segment - for example, the

more sophisticated customers are more likely to demand more complex

products such as alternative investments, whilst others may prefer

discretionary portfolio management.

The new components are added to the experience and the 'base' experiences

elements become defined in more depth, according to the specific needs of

the customer segment.

Once the segment experiences have been defined, the associated capabilities

must again be identified. The hierarchical approach to defining customer

experiences helps filter these capabilities as: -

it is possible to identify experience elements that are common to more

than one segment - this will carry a higher priority for development as they

will benefit more customers;


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the segmentation exercise will provide comparative sizings for the target

segments.

Capabilities required for the larger, more profitable segments take

precedence over those needed for smaller segments.

The Organization-Specific Experience

Having identified the base and segment specific elements of HNW

customer experience, the final step is to identify how the experience that

each organization offers its customers is distinct from other banks. Now this

would mean that one has to distinctly identify the components of the

experience that are not only associated with a particular bank but also be the

key differentiator.

This process will define: -

Elements of the organization style and culture.

Products and Services to be provided.


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In the same way, every brand is different, so is the experience.

Organization- Specific Experience


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CRM- A DVANTAGES FOR THE BANKING SECTOR

CRM is boon to the banking sector because of the following benefits of

CRM

The organization need to implement CRM to be more friendly and

customer centric.

It helps to interact with their customers in a more informal manner.

It helps the manager, agent and other officials to understand the status

of the client, his past transaction, last meeting with the agents,

comments of the agent, manager and employees etc.

It facilitates the customers to deposit their premium in any

computerized branch all over India.

The management can look in to all the details of the clients at the

moment regarding his policy, the premium paid and the due date for

the next premium.

CRM helps in maximizing revenue by carefully targeting the

customers and offering more products and services. One can cross-sell

and up-sell. Also, these targeted customers could be upgraded to

newer versions of products or sold additional products and solutions.


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Internal data in the CRM system can help to identify the most

profitable customers. Bu paying special attention on these customers,

it is possible to make loyal.

The efficiency of the sales team goes up as their system and processes

are computerized and they discard paper systems. The time saved by

them can go in to customer engagements thereby increasing their

productivity which in turn should result in increased sales.

Customer service can also be offered on a multiple channels to ensure

that customers have easy and convenient access to service

representatives within the organization. Effective customer service

leads to improved customer satisfaction and increased revenues in the

long term from the same customers.

CRM with business intelligence tools can help insurance firms to monitor

the customer behavior by giving them a holistic 360-degree view of their

customers. Further, by using CRM, the banking sector can enhance and

diversify its activities through:

Providing market opportunities within an existing customer

database through cross-selling and up-selling capabilities.


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Determining customer behavior by effectively using the

predicting capabilities.

Collecting information regarding customer retention which helps

to target them through the retention campaigns.

Segmenting customers in the way to apply the appropriate

marketing strategies.

Market automation that combines analytics with campaign

management functionality.


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CONCLUSIONS AND FINDINGS

Today, CRM is a boon to the banking sector. With a little help from

CRM software, the banks can sale their product and various facilities like

ATM, Credit Card, Debit Card etc. to the same customer but, Indian

Banking sector are slow in adopting CRM. One of the major reasons for this

has been a lack of proper understanding of CRM as a concept and how it

could benefit an organization. In the past, CRM was identified with call

centers. However, this has changed in recent times with a better

understanding of the various components of CRM. At present, CRM is

expected to serve as an integrated approach to provide differentiated

customer experience while identifying, acquiring and retaining customers to

ensure efficiency in the banking sector.

introduction of customer relationship

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