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Customer Relationship

Management-Introduction

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Marketing History

• 1940: efort toards marketing o!manu!actured goods

• "0-90:shi!t toards ser#ice $asedcompanies

• %000:e&perience economy

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'nderstanding the shi!t

Exchange Paradigm Relational Paradigm

 (ime )erspecti#e *hort )rolonged

Mktg +unction Marketing mi& Interacti#e marketing

,uality imension )roduct .uality/customersatis!action .uality

,uality o! e&perience

Metrics Market share *hare o! allet !ocus

Interdepartmentalsupport

o High

Internal Marketing egligi$le 2ery high

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Relationship orientation of marketing in different era (Adopted from Sheth and

Parvatiyar, 1995)

Is relation in $usiness ne phenomenon3

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Paradigm Shift

• )re-industrial era-Trust, trade within clans,silk route, early branding

• Industrial era -IR, mass production, shift in jobs,mktg institutions, metrics like sales,revenue, MS, protability!

• )ost industrial era -comple" products,service economy, #$M

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*hi!t continues55

•  (he 4-) paradigmin#ol#es marketing toanonymous masses o!customers

•  (he relationshipmarketing paradigm in:

 – industrial marketing – ser#ices marketing

 – managing channel

 – strategic alliances

 – 6%6 marketing

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Relationship Marketing

RM dras attention to the importance o! retaining

as ell as attracting customers/ ith emphasis$eing placed on the de#elopment o! long term

relationships ith customers5

)rimary goal o! RM is to $uild and maintain a$ase o! committed customers ho are pro7ta$le!or the organi8ation5

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Customer i!e Cycle

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6onding !or

Customer Relationship

e#el 1: +inancial $onds

%olume and fre&uency of rewards5

e#el %: *ocial 6onds

'ersonal relationships, continuous and social bonds!

e#el :Customisation $onds

Customer intimacy mass customi8ation

e#el 4 *tructural $onds

 oint in#estments shared processes and e.uipment

6erry ; )arasuraman<1991=

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Customer oyalty >&ercise

•  (hink o! a ser#ice pro#ider to hom youare loyal5

• ?hat do you do <your $eha#iors/ actions/!eelings= that indicates you are loyal3

• ?hy are you loyal to this pro#ider3

• ?hat !actors ha#e in@uenced the!ormation o! your loyalty3

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RM to CRM

• CRM and Relationship Mktg5 term usedinterchangea$ly in academics5<)ar#atiyar ; *eth %001=

• CRM is more a$out informationenabled relationship marketing5<Ryals ; )ayne %001=

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)ractitionerAs #ie

+orrester  says that CRM is the $usiness processesand supporting technologies that support the keyacti#ities o!: targeting/ ac.uiring/ retaining/understanding/ and colla$orating ith customers5

Customer relationship management <CRM)  is a$usiness strategy ith outcomes that optimi8epro7ta$ility/ re#enue  and customer satis!action$y organi8ing around customer segments/

!ostering customer-satis!ying $eha#iors andimplementing customer-centric  processes5 CRMtechnologies should ena$le greater customerinsight/ increased customer access/ more-

efecti#e interactions/ and integrationthroughout all customer channels and $ack-

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?hat researchers say

CRM is the core $usiness strategy that integrates

internal processes and !unctions/ and e&ternalnetorks/ to create and deli#er #alue to targetedcustomers at a pro7t5 It is grounded on high.uality customer related data and ena$led $y I(

(rancis )uttle *++

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e7nition5

CRM is a comprehensi#e strategy and process o!ac.uiring/ retaining and partnering ith selecti#e customers to create superior #alue  !or thecompany and the customer5 It in#ol#es theintegration o! marketing/ sales/ customer ser#ice/and the supply chain !unctions o! the organi8ationto achie#e greater eciencies and efecti#enessin deli#ering customer #alue5 'arvatiyar . Seth*++/0CRM is the practice o! analy8ing and utili8ing

marketing data$ases and le#eragingcommunication technologies to determinecorporate practices and methods that illma&imi8e the li!etime #alue o! each indi#idualcustomer to the 7rm %! #umar,1erner

 2! Reinart30

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ink 6eteen CRM and Customer 2alue

Customer 2alue: (he economic

value o! the customer relationship

to the 7rm E e&pressed on the $asis

o! contri$ution margin or net pro7t

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)ro7t Denerated $y a Customer F#er (ime

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)ro7t Impact o! G )ercent Increase inRetention Rate

Source: +5 +5 Reichheld/ oyalty and the Renaissance o! Marketing/ Marketing Management, #ol5 %/ no5 41994 5 1G5

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 (he Customer )yramid

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Misunderstandings a$outCRM

• CRM is data$ase marketing

• CRM is marketing process

• CRM is an I( issue• CRM is a$out loyalty schemes

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>J6>R* +FR (H> DRF?(H F+ CRM

%1

Emergence of service economy

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Market Maturity

%%

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Misalignment $eteen Re#enueand )ro7t

%