Vivek Bohra IIm Projecton CRM

8/9/2019 Vivek Bohra IIm Projecton CRM

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Summer Training Report

In

Datamatics Global Services

On

Customer Relationship Management

Submitted in partial fulfillment of the requirements of the twoyearPost Graduate Programme (PGP)

Submitted by

Vivek Bohra.

Roll No: PG20095063

Batch: 2009-2011

IILM Institute for Higher Education, Gurgaon

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Declaration

I hereby declare that the Project work entitled, Customer Relationship

Management submitted by me for the partial fulfillment of the Post

Graduate Program (PGP) to IILM Institute for Higher Education, is my

own original work and has not been submitted earlier either to IILM or to any

other Institution for the fulfillment of the requirement for any course of

study. I also declare that no chapter of this manuscript in whole or in part is

lifted and incorporated in this report from any earlier / other work done by

me or others.

Vivek Bohra (PG20095063)

Place :

Date :

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Acknowledgement

I express my heartfelt gratitude to Ms. Ankita Singh ( Manager- Coroprate HR : DatamatricsGlobal Services Ltd. Pune), for giving me the opportunity to undertake a project on CustomerRelationship Management under his guidance and observation.

I also express my deep sense of gratitude to my mentorDr. Sanyukta Jolly for her unflinching

support and making herself available for discussion and providing me as required facilities

whatever, whenever needed throughout duration of my dissertation.

Last but not least I would like to sincerely acknowledge the help received from various persons

and sources in collecting datas and information in completing this satisfactory Project.

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Executive Summary

As a part of my MBA curriculum I have done my summer internship training at Datamatrics

Global Service Ltd. In this report I am going to share my experience in the company.. I wassupposed to research on the status of CRM in India.

Deep customer relationships represent a continuing stream of income and a critical platform fornew growth. They also represent a powerful and defensible barrier to entry. Establishing and

strengthening long term relationship with your customers is the key to success. Its the focus of a

well structured and coordinated process of customer relationship management.CRM involves farmore than automating processes in sales, marketing and service and then increasing the

efficiency of those processes. it involves conducting interaction with customers on a more

informed basis and individually tailoring them to customers needs.

This project helps to gain a deeper understanding about how CRM can contribute towardsimproving the way you measure and optimize your relationships with customers.

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Contents

Company Analysis

Infrastructure

..8

Branch Network.9

Management Team..11

Groupclients13

Quality Policy..14

Group Synergies &Alliances17

Corporate social responsibilityinitiatives..19

Siebal CRMservices20

Chapter 1 (Conceptual Framework For CRM)

Key CRMPrinciples

.27 CRM

Activities29

Emergence Of CRMPractice..30

CRM FormationProcess.31

CRMPrograms..33

CRM ImplementationIssue.34

Chapter2 ( CRM & Related Concepts )

KM With Focus onCRM..36

Role Of CRM In Context Of SCM37

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ERP &CRM..37

Chapter 3 ( Technological Tools For CRM)

Tools38

Data Mining ForCRM.39

Existing CRMSolutions..40

CRM Model..41

eCRM42

Review & Assessment Of CRMSolutions43

Case Study 1 Implementing A Technology

Based CRM Solution The ICCI Experience.46

Chapter 4 ( Organizing For CRM)

AssessingNeeds 52

Employee Empowerment & CRM

Hewlett Packard (HP)

Case53

Chapter 5 ( Status OF CRM In INDIA)

Survey OF ServiceFirms56

ResearchObjective..56

Methodology.. 57

Analysis OF

Findings 57

Chapter 6 ( CRM In Select Services)

Customer Relationship Management AtAPTECH..64

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CRS..66

Financial Framework ForCRM70

CRM IN HMTL

.72

Refrences.. 75

Annexure.. 76

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Listening to customers must become everyones business. With most competitors moving ever

faster, the race will go to those who listen and respond more intently.

Tom Peters, Thriving on Chaos

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Conceptual Framework for CRM

Company profile

Datamatics is a global provider of intelligent, value-driven technology and business solutions.

These solutions span IT consulting, business process transformation, off-the-shelf technologysolutions and customized software services. They leverage our proven expertise in developing

technology to drive business efficiency and productivity.

Product innovation, IP-creation and technology collaboration form the core of our Company's

positioning as a 'one-stop-solution provider'. Datamatics has built up strong teams of Business

Analysts, Technology Architects, Delivery Experts, Quality Specialists and Marketing and Pre-

sales Professionals. These teams are geared up to provide solutions that are based on technologyplatforms that deliver competitive advantage to our customers.

Our domain and technology experts have integrated Artificial intelligence (AI) into many of thesolutions that Datamatics currently markets. For instance, AI has given i-Q, our path-breaking,

intelligent information processing solution, the capability to think like a human being, giving the

software intelligence and intuition. Besides AI, i-Q also conducts tree search and is capable ofpattern recognition, automatic learning, displaying confidence level of information located, auto

correction, and has Heuristics in hundreds of its components.

This success is being replicated across the organization, and solutions with similar features have

already been launched during the past year: i-Mask, i-Cat, i-Pub, i-Mark and i-

Clinic.

Mobile Serve , a web-based application for developing surveys on handheld devices, has been

tested and found to be highly-effective. Built on the latest technology, MobileServe givescustomers the power to conduct surveys using a range of mobile phones and PDA platforms.

With customers increasingly demanding solutions to improve operational efficiency, faster go-

to-market, higher employee productivity and maximized customer satisfaction, Datamatics has

focused on developing solutions to meet these market needs. Dartenium and e-PayablesManager are two such solutions. Dartenium is a high-productivity automation framework for

web testing. Similarly, e-Payables Manager is a configurable Web-based workflow system

specifically configured to cater to various Accounts Payable Functions. It is widely used by our

customers including many Fortune 100 companies. Its flexibility has helped many of ourcustomers in their initiatives to bring automation, visibility and agility to their Accounts Payable

process.

Datamatics Global Services has emerged as a leader in niche areas like embedded engineering

and telecommunications, having developed solutions for ticketing, toll and parking applications.

Such solutions have components that help manage user profiles better, and systems to maintaininventory and issue tickets, smart cards and discount coupons, and to configure vehicle type,

tariff and concessions, etc.

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http://www.datamatics.com/Forms/iQ.asphttp://www.datamatics.com/Forms/iQ.asphttp://dartenium.datamatics.com/http://www.datamatics.com/ePayablesManager.htmhttp://www.datamatics.com/ePayablesManager.htmhttp://dartenium.datamatics.com/http://www.datamatics.com/ePayablesManager.htmhttp://www.datamatics.com/Forms/iQ.asphttp://www.datamatics.com/Forms/iQ.asphttp://dartenium.datamatics.com/http://www.datamatics.com/ePayablesManager.htmhttp://www.datamatics.com/ePayablesManager.htmhttp://dartenium.datamatics.com/http://www.datamatics.com/ePayablesManager.htm


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We continue to be driven by our vision To be a World Class Organization Admired for

Consistently Delivering Superior Business Value.

Infrastructure

For nearly three decades DFSL has invested in world class infrastructure capable of servicing

Indias expanding capital markets. Our offices provide an environment where employees can beat their productive best and ensure the highest service levels.

Located in the heart of Mumbai, Indias financial capital

Over 70,000 sq. ft. of state of the art facilities

40,000 sq. ft. of physical document library and retrieval facilities

Strong rooms as per RBI guidelines to store negotiable financial instruments & sensitivedocuments

Access controls across all facilities

Round the clock security provisions by trained staff

Branch Network

To ensure highest quality service and convenience to investors, DFSL has created a nationalnetwork of branches, Datamatics Investor Service Centers (DISC), in strategic locations across

India.

Staffed with friendly and helpful personnel, our branches provide various services

including:

Transaction requests

Service requests

Account queries

Statement of account generation

Complaint lodging and redressal etc.

Mumbai Nagpur Ahmedabad Indore

Jaipur Bangalore Patna Kolkata

Bhopal Raipur Ludhiana New Delhi

Chennai Visakhapatnam Baroda Kochi

Rajkot Lucknow Chandigarh Vijaywada

Mangalore Hyderabad

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Awards and Milestones

1975

The Incorporation of Datamatics.

1983

Pioneered Indias first offshore software factory by setting up a DedicatedOffshore Center for Wang Labs, USA.

1989

First company to establish a satellite link from its software development center in

India to AT&T Bell Labs, USA

1992

First Electronic Publishing Company in India.1995

Chairman, Dr. LS Kanodia, inducted into the Dataquest Hall of Fame... and

remains the only software professional to be thus honored.

1997

First in India and second in the world to obtain an ISO 9002 certification in

Electronic Publishing.

1998

First company in the world to guarantee a 99.997% accuracy level in data capture.

1999

Prime Minister of India confers the ESC Most Innovative Software Product

Award upon Datamatics Technologies.

2000

First Indian Technology Company to acquire controlling stake in a US listed data

management company (Saztec International).

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2003

First Indian company to scale up a dedicated facility into a Joint Venture in theBPO space via acquisition of CorPay for providing customized outsourcing

solutions for payables processing and other Finance & Accounting functions.

2004

First Indian non-voice third party BPO Company to get listed on BSE and NSE.

2006

Selected as Rising Star at 'The Global Outsourcing 100' 2006 Outsourcing WorldSummit.

2006

Among Top 50 best managed outsourcing vendors by 'The Black Book of

Outsourcing'.

2007

Winner of the IMC Ramkrishna Bajaj National Quality Award 2006.

2007

Ranked Third globally among global document process outsourcing providers by

'The Black Book of Outsourcing'.

2007

Winner of International Asia Pacific Quality Award. Becomes first and onlyIndian company to win the award in Services category, beating competition from

hundreds of companies across the services spectrum in countries such as the US,

Japan, Australia, Russia, Canada...

2009

Amalgamation of IT and BPO divisions complete.

Management Team

Dr L. S. Kanodia Chairman and Founder, Datamatics Group

Rahul L Kanodia Vice Chairman and CEO

Vidur Bhogilal Chief Financial Officer

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Sameer L. Kanodia Executive Director

Arvind Sirrah President, US

Dr. C M Dwivedi President and Global HR Head

Michael Thuleweit Managing Director, Datamatics GmbH (Germany / DACH)

Navin Anand President, UK / Europe

Ramkumar Akella Chief Operating Officer

TECHNOLOGY

At DFSL we believe that technology is a key enabler to significantly improve service levels and

guarantee customer delight. DSFL has nearly three decades of experience in the R&T businessand we leverage our experience to develop world class solutions to enhance our businessprocesses. We use contemporary software technology, state of the art infrastructure and periodic

BPR (Business Process Re-engineering) activities to make our processes efficient, our employees

more productive and continuously improve our service standards.

Software Overview

State of the art Transaction Processing and CRM software built on the Microsoft .Netframework

Back-end database on the latest Oracle 10g

Image based transaction processing to enable anytime, anywhere operations

Built in controls and validation to ensure error free transaction processing

Parameterized software, enabling customization to meet the unique requirements of

different scheme features of AMCs

System is capable of catering to high volumes of transactions

Complete integration of all transaction modules offers 360 degrees view of the Investor

All transactions can be tracked at every stage of processing from receipt to dispatch ofconfirmations

Flexible software architecture that can be integrated with software systems used by theAMCs and Distributors

AMCs and Distributors can get real time data feeds of transactions to keep their systems

and database always updated

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Data Center

International Standard Data Center that guarantees

o High Availability and Superior Performance leading to higher productivity andensure meeting clients SLAs

o Redundancy to ensure minimum downtime and no loss of data

o Security to protect our clients critical data and applications

o Scalability to be able to scale up our operations as per the requirements of the

client and upgrade to better technology as and when available

Physical security

o Biometric fingerprint scanners and secured card access

o High-security, tamper-proof cabinets with specially keyed locks

o Restricted access to server rooms and 24-hour on-site security staff

Group Clients

The Datamatics Group has partnered with top service providers from around the world to provideour clients an unmatched value proposition.

Partial List Of Clients

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Quality

Datamatics Quality Policy

Amongst only few ISO 9001:2000 certified R&T agents

4 quality layers for all transactions

o Maker accurate data capture from application form

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o Checker double data entry of critical fields and error corrections

o Auditor recheck all high value transactions, complex transactions from a

randomly generated pool

o Validation rule based systems validation of all transactions before final update

of records

Documented processes, guidelines & checklists for all service operations

Dedicated internal audit and QA team for all processes & critical outputs

Concurrent audits through external auditors

Jidoka - Quality check at every step of the process

Pokayoke Fail safe systems and processes

Kaizen - Continuous improvement

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GROUP STRENGTHS

DFSL is a part of the Datamatics Group of Companies. Through this association we are able tooffer our clients a holistic value proposition that is unique only to Datamatics. By associating

with DFSL, our clients establish a relationship with the Datamatics Group. The Datamatics

Group Value Proposition:

Datamatics Ltd (DL)

As the flagship company, DL is a pioneer in offshore development empowering clients with a

competitive edge through software solutions in numerous areas.

We are able to leverage DLs strengths in:

Best in class software solutions used in international financial services markets

Established software development processes

Continuous improvement to our technology based on international best practices andquality standards

Assured timely solutions

Expertise in Migrations

Datamatics Technologies Limited (DTL)

DTL is an end-to-end BPO service provider to the Electronic Publishing, Legal, Healthcare, and

Tax and Financial Accounting industry verticals.

We are able to leverage DTLs strengths in:

World class Data Management, Data Warehousing and Business Intelligence solutions

Association with companies such as File Net and Humming Bird for work flow anddocument management solutions

World class best practices in seamless business process migration

Proven ability to offer solutions such as Data Migration, Warehousing, Analytics,

Knowledge

Management and Enterprise Portal technologies to help client's build Enterprise-wideInformation Architecture.

Datamatics Staffing Services (DSS)

DSS is among India's leading recruitment organizations with over 1,300 person years experiencein recruitment consulting

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We are able to leverage DSSs strengths in:

Recruitment of quality and professional staff

Augment staff strength in a very short notice during busy periods

Industry best practices with respect to keeping motivation high and maintaining a low

attrition rate

GROUP SYNERGIES

We extract valuable group synergies to provide un-matched services to our clients

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ALLIANCES

Strategic Partners

Product Partners

Implementation Partners

PEOPLE

At DFSL our people are our greatest asset. We are proud of our staff and they are proud of

working with us. 400+ strong workforce

Lowest attrition rate: 8 %.

Minimum Entry Level: Graduation

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Domain expertise across various financial processes with dedicated teams of qualified

finance professionals

Dedicated legal team headed by a High Court lawyer to handle all legal aspects

Dedicated ISO and QA team to manage compliance

Training

We also inculcate a system of continuous training to ensure highest productivity. Employees

receive on going training on latest technology, processes and policies and most importantly on

providing exceptional customer service.

Corporate Social Responsibility Initiatives

Datamatics Global Services Limited has recognized the underutilized potential of the educated

and skilled physically-challenged professionals. Datamatics has provided such individuals anopportunity to contribute to the organization's growth while ensuring that they too benefit

through the Knowledge Associates (KA) programme.Datamatics has tied up with a non-governmental organization called NASSEOH (National

Society for Equal Opportunities for the Physically Handicapped) and Amar Seva Sangam where

nearly 60 physically-challenged individuals work as Knowledge Associates in the OutsourcingManagement Team. Apart from these, nearly 20 KAs work from home.

Through the KA programme, Datamatics has provided such individuals the satisfaction of being

financially independent, thus improving their status in society. The programme is tailor-made forindividuals who cannot commit themselves to full-time employment or travel any distance to the

place of work.

Datamatics has also enabled the NGOs to provide opportunities for the physically-challenged bydonating PCs to facilitate their IT set up. Trainers from the organization visit the NGOs and

homes of the KAs to conduct training and feedback sessions. In some instances, a mentor co-ordinator is stationed at the NGO for 3-6 months to co-coordinate training & hardware setup.

Application Management Services

The AMS team at Datamatics Global Services combines its multi-domain expertise with the

decades of experience in designing and deploying new applications that are robust, reliable and

scalable, modernizing legacy applications and giving existing applications the competitive edge.

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Datamatics AMS Solutions Framework

AMS Center of Excellence

Siebel CRM ServicesSiebel practice at Datamatics is well established and leverages our vast experience across various

industry verticals. We offer industry specific Customer Relationship Management (CRM)solutions to our customers and have proved our expertise in several Siebel implementations. Our

value added services include:

Siebel Testing

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Siebel Implementation

Siebel Customization

Siebel Maintenance

Siebel Support

Pre-packaged Siebel support

Siebel Pre-Implementation

Siebel Post-Implementation

Siebel Enhancements

Business process analysis

Implementation of Siebel

Customizations / enhancements and upgrade to current Siebel versions

Pre-packaged Siebel support and upgrade services

Our Siebel Center of Excellence support model can help organizations by:

Supporting and enforcing business and IT processes

Lowering support costs

Preserving knowledge assets

Enforcing quality standards

Some of the benefits that we have delivered to customers include:

Improved quality of service to end customers

Reduced costs by 40%

Increased responsiveness to end customer

Oracle ERP

Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and SupplyChain Management (SCM) are areas where Datamatics is engaged in providing solutions to

customers for a decade. We are one of the most preferred partners of Oracle's E-Business suite

for implementation, upgrade, maintenance, and support services. The most important factor in

our success is our objectives are closely aligned with our customers in addition to quality, lowerTCO (Total Cost of Ownership), and rapid implementation.

Our Oracle practice helps optimize an organization's investment through a complete set ofapplication life cycle management services.

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At Datamatics, we have created an Oracle Center of Excellence (CoE) to constantly improve our

services for customers. Oracle Center of Excellence focuses on upcoming Oracle technologies

and works on designing new tools and frameworks. Through the CoE, we are able to deliver

Predictable service levels to customers

Leverage global best practices

Provide access to a wider pool of talent

SAP ERP Services

Datamatics has a proven track record in providing services for the SAP package. We provide agamut of services that enable our customers to perform better:

SAP Application Support

SAP Testing

Enterprise Reporting Applications

SAP Application Implementation

Application Migration, Consolidation and Upgrade Services for SAP

Enterprise Application Integration Services ..

The proven benefits from this accelerated ASAP methodology include:

Reduced costs

Guaranteed quality and knowledge transfer

Improved efficiency in a shorter duration

Supply Chain Management Services

We provide complete business consulting and technical integration services for supply chain

management (SCM). . Our SCM technology practice provides expertise in solutions like JDA(formerly Manugistics) and SAP backed by experienced technical and functional consultants as

well as certified Domain experts.

We have a strategic alliance with JDA for implementations services. We have a dedicated

Software Development Center in India for developing / enhancing and creating client specificrequirements. We have completed over 50 implementations in different Business Segments inlast 5 years.

Our service offerings are:

Consulting and implementation services

Migration / Upgrade services

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Post implementation services

Business Process tuning

Education services

Testing services

Datamatics Funnel Methodology

Datamatics uses a funnel methodology to deliver a higher selection ratio. We set down

requirement analysis and job descriptions in association with clients. A team of 25 recruitmentspecialists together with technical experts then evaluates all candidates through multiple levels.

Only those who meet the criteria are forwarded to the client for final evaluation.

SAAS and SLA

The business potential of Software as a Service (SAAS) has exponentially increased in the last

few years. Organizations are today increasingly adopting the SAAS framework and see

significant value in it. We help customers in formulating solutions that ensure their SLAs arebuilt to have a positive business impact with SAAS. This includes precise definition of outages,

downtimes, components, resource availability among others. Thus we ensure that the entire

services suite is clearly defined by accurate definition of SLA terms. This clarity helps our

clients achieve optimum operational efficiency and increased ROI.

Portfolio Services

Datamatics offers the following Portfolio services:

Portfolio analysis

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Portfolio consolidation

Portfolio rationalization

Our customers have benefited in several ways from their engagements with us including:

Demonstrated expertise in portfolio management for International Organizations

Large pool of skilled and trained resources for portfolio analysis and strategies

Process based risk management matrix for portfolio

Optimize project risk and return with our in-house portfolio solution

Perform successfully in critical, large scope, size and complexity projects

Data Warehousing & Business Intelligence

Datamatics end-to-end consulting and implementation services can efficiently synchronize your

business data into a Global Data Repository or Enterprise Warehouse and help answer your mostdifficult business queries.

Information Strategy Planning & Road-map Consulting

Enterprise wide Data Consolidation and Warehouse Construction

Corporate level Information Delivery and Management Reporting

Proactive Data Warehouse Maintenance

Service Spotlight - DW Rescue Mission

Datamatics offers end-to-end services in Data Warehousing & Business Intelligence. Ourcompetence is reflected in our team of highly skilled and trained consultants, who have superior

technical, business consulting skills, domain expertise and project management skills.

We believe in our technological expertise & experience of successfully building integrated

Enterprise Data Warehouses (EDW) and Business Intelligence (BI) applications utilizing our

Global delivery model.

Information Strategy Planning & Road-map Consulting

How the data warehouse is going achieve Corporate-objectives

Identify Cross-functional Needs

Long-term vision of the warehouse

Create the technology plan

Identify & Select a toolkit and associated methods

Analyze, Prioritize and Target the needs

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Enterprise wide Data Consolidation and Warehouse Construction

Understand the business & work processes

Reference data through dimensional analysis

Design for usage while recording history

Develop and test the queries built and feed results for changes

Utilize various modeling techniques

Lift Off! Go live

Corporate level Information Delivery and Management Reporting

Trace and Grasp Reporting Environment

Create Reporting Plan

Setup Reporting level security hierarchy

Build and test management reports

Create iterative or automated report schedules

Proactive Data Warehouse Maintenance

Monitor the usage

Analyze and Adapt warehouse to meet current & future business needs

Align the warehouse with evolving business needs

Ensure each release supports the greatest needs of the business

Communicate the DW contributions

Service Spotlight DW Rescue Mission

Data Warehouse utilization assessment

Trace Problem Areas GAP Analysis

Corrective Planning to plot the user expectations

Align the warehouse to meet existing & future needs

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Chapter1 Customer Relationship management: an Overview

Before we begin to examine the conceptual foundations of CRM, it will be useful to define what

CRM is. A narrow perspective of customer relationship management is database marketingemphasizing the promotional aspects of marketing linked to database efforts.

Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in which

a variety of aftermarketing tactics is used for customer bonding or staying in touch after the sale

is made.

Shani and Chalasani define relationship marketing as an integrated effort to identify, maintain,

and build up a network with individuals consumers and to continuously strengthen the network

for mutual benefit of both sides, through interactive, individualized and value-added contacts

over a period of time.

The core theme of all CRM and relationship marketing perspectives is its focus on co-operative

and collaborative relationships between the firm and its customers, and/or other marketing

actors.

CRM is based on the premise that, by having a better understanding of the customers needs and

desires we can keep them longer and sell more to them.

Growth Strategies International (GSI) performed a statistical analysis of Customer satisfaction

data encompassing the findings of over 20,000 customer surveys conducted in 40 countries by

Infoquest.

The conclusions of the study were:

A Totally Satisfied Customer contributes 2.6 times as much revenue to a company as a

Somewhat Satisfied Customer.

A Totally Satisfied Customer contributes 17 times as much revenue as a Somewhat

Dissatisfied Customer.

A Totally Dissatisfied customer decreases revenue at a rate equal to 1.8 times what a TotallySatisfied Customer contributes to a business.

By reducing customer defection (by as little as 5%) will result in increase in profits by 25%

to 85% depending from industry to industry.

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An important facet of CRM is customer selectivity. As several research studies have shown

not all customers are equally profitable (Infact in some cases 80% of the sales come through

20% of the customers). The company must therefore be selective and tailor its program and

marketing efforts by segmenting and selecting appropriate customers for individual marketing

programs. In some cases, it could even lead to outsourcing of some customers so that a

company better utilize its resources on those customers it can serve better and create mutual

value.CRM is defined as:

Customer Relationship management is a comprehensive strategy and process of acquiring,

retaining and partnering with selective customers to create superior value for the company

and the customer.

Key CRM principles

Differentiate Customers: All customers are not equal; recognize and reward best customers

disproportionately. Understanding each customer becomes particularly important. And the same

customers reaction to a cellular company operator may be quite different as compared to a car

dealer. Besides for the same product or the service not all customers can be treated alike and

CRM needs to differentiate between a high value customer and a low value customer.

What CRM needs to understand while differentiating customers is:

- Sensitivities, Tastes, Preferences and Personalities

- Lifestyle and age

- Culture Background and education

- Physical and psychological characteristics

Differentiating Offerings

Low value customer requiring high value customer offerings

Low value customer with potential to become high value in near future

High value customer requiring high value service

High value customer requiring low value service

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High

Low

Low HighCustomer Value

Keeping Existing Customers

Grading customers from very satisfied to very disappoint should help the organisation in

improving its customer satisfaction levels and scores. As the satisfaction level for each customer

improves so shall the customer retention with the organization.

Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life event trigger

points by customer, marketers can maximize share of purchase potential. Thus the single adults

shall require a new car stereo and as he grows into a married couple his needs grow into

appliances.

Increase Loyalty Loyal customers are more profitable. Any company will like its mindshare

status to improve from being a suspect to being an advocate. Company has to invest in terms

of its product and service offerings to its customers.

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Low value customers who

require high levels of service

must either purchase the higherlevel of service or become our

competitors low value/high

cost customers

ServiceRequir

ement

High value customers who

require a high level ofservice are maintained

without expanding the

costly offering to the entirecustomer population

Fig. 1 Customer value Service Matrix


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High

L

ow

*Focus On Short Term Profitability.

Spend Minimum Energy To Meet Your

Objectives.

#Dont Pursue.

Use Opportunity As It Comes.

Short Term Acquisition Shouldnt Affect

Long Term Image.

*Very cautious decision needed. Re-examine

business Plan & Strategy. Evaluate That

Your Loss (i.e. Your competitors gain)

Doesnt become nightmare for you.

#Needs In-depth strategic review as acquisition

alone and dissatisfaction later could be more

harmful

Low High

(Fig 2. Categorizing Customers)

Summarizing CRM activities:

The CRM cycle can be briefly described as follows:

1. Learning from customers and prospects, (having in depth knowledge of customer)

2. Creating value for customers and prospects

3. Creating loyalty

4. Acquiring new customers

5. Creating profits

6. Acquiring new customers

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1

Creating valuefor customers &

prospects

2Creating loyalcustomers

3

Acquiring new

customers

4

5

Creating

Profits

Learning from

customers a&

prospects

Fig.3

CRM Activities

*You have No Choice But To

Handle Them Very Carefully.

Will Consume Energy

# Think Of Innovative Ways of

Getting them On Your Side, ButThe Cost Of Acquisition Must Be

Controlled

StrategicIm

portanceToYourBu

siness

Plan

*Cultivate Relationship.

Spend Energy.

Go Out Of Your Way.

#Think Of Strategies TO Move Them

Away From Competition.Will Consume Disproportionately

High Energy.

Relationship & Profitability Potential

*ExistingCustomers

#Potential

Customers


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The Emergence of CRM Practice

The Past:

Looking back at a snapshot history of marketing, we can see the following clear developments

and progression over the last four decades:

1960s the era of Mass marketing, when Gibbs SR toothpaste began the first marketing

of this kind with its black and white campaign.

1970s saw the beginning of segmentation, direct mail campaigns and early

telemarketing (such as publishing)

1980s where Niche marketing made millionaires of those who were best at it.

1990s Relationship Marketing. The explosion of telemarketing and call centres, all set

up to develop relationships with customers. The recognition of the true value of retention

and the use of Lifetime Value as a business case.

In recent years however, several factors have contributed to the rapid development and evolution

of CRM. These include: -

1. The growing de-intermediation process in many industries due to the advent of

sophisticated computer and telecommunication technologies that allow producers to directly

interact with end-customers. For example, in many industries such as airlines, banks

insurance, software or household appliances and even consumables.

2. Advances in information technology, networking and manufacturing technology have

helped companies to quickly match competition. As a result product quality and cost are no

longer significant competitive advantages.

3. The growth in service economy. Since services are typically produced and delivered at the

same institution, it minimizes the role of the middlemen. .

4. Customer expectations are changing almost on a daily basis. Newly Empowered customers

who choose how to communicate with the companies across various available channels. Also

nowadays consumers expect a high degree of personalization.5. Emerging real time, interactive channels including e-mail, ATMs and call centre that must

be synchronized with customers non-electronic activities. The speed of business change,

requiring flexibility and rapid adoption to technologies.

6. In the current era ofhyper competition, marketers are forced to be more concerned with

customer retention and customer loyalty.

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7. As several researches have found out retaining customers is less expensive and more

sustainable competitive advantage than acquiring new ones..

8. The globalization of world marketplace makes it necessary to have global account

management for the customers.

CRM Formation Process

In the formation process, three important decision areas relate to defining the purpose (or

objectives) of engaging in CRM, selecting parties (or customer partners) for appropriate CRM

programs and developing programs (or relational activity schemes) for relationship engagement

with the customer.

CRM Purpose

32

Purpose

Increase

Effectiveness Improve

Programs

AccountManagement

Retention

Partners

Criteria Process

Role Specification

Planning Process

Process Alignment

Monitoring Process

Communication

Employee Motivation

Employee Training

Relationship

Performance

Strategic Financial

Marketing

Retenti

Evolution

Enhancement

Improvement

Fig 5. CRM Process Framework


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The overall purpose of CRM is to improve marketing productivity and enhance value for parties

in involved in the relationship. By seeking and achieving operational goals, such as lower

distribution costs, streamlining order processing and inventory management, reducing the burden

of excessive customer acquisition cost, and through customer retention economics, firms could

achieve greater marketing efficiencies. They can enhance marketing effectiveness by carefully

selecting, customers for its various programs, individualizing and personalizing their market

offerings to anticipate and serve the emerging needs of individual customer, building customer

loyalty and commitment, partnering to enter new markets and develop new products, and

redefining the competitive playing field for their company. Thus, stating the objectives and

defining the purpose of CRM in a company helps clarify the nature of CRM programs and

activities that ought to be performed by the partners. Defining the purpose would also help in

identifying suitable relationship partners who have necessary expectations and capabilities to

fulfill mutual goals.

Relational Parties

In the Initial phase, a company has to decide which customer type and specific customers or

customer groups will be the focus of their CRM activities.

CRM Programs

A careful review of literature and observation of corporate practices suggest that there are three

types of CRM programs: continuity marketing; one-to-one marketing; and, partnering programs.

These take different forms depending on whether they are meant for end-consumers, distributor

consumers, or business-to-business customers.

.

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Customer Types

Program Types

Mass Markets Distributors Business to

Busine

ss

Markets

Continuity Marketing After- Marketing

Loyalty Programs

Cross-Selling

Continuos

Replenishment

ECR Programs

Special

Sourcing

Arrangements

One-to-One Marketing Permission Marketing

Personalization

Customer Business

Development

Key Account

Global

Account

Partnering/Company-

Marketing

Affinity Partnering

Co-Branding

Logistics Partnering

Joint Marketing

Strategic

Partnership

Co-Design

Co-Develop

Table 1 presents various types of CRM programs developed for different types of

customers

CRM Programs

Continuity Marketing Programs

Take the shape of membership and loyalty card programs where customers are often rewarded

for their member and loyalty relationships with the marketers. The basic premise of continuity

marketing programs is to retain customers and increase loyalty through long-term special

services that has a potential to increase mutual value through learning about each other.

One-to-one Marketing

Meeting and satisfying each customers need uniquely and individually. In the mass markets

individualized information on customers is now possible at low costs due to the rapid

development in the information technology and due to availability of scalable data warehouses

and data mining products.

Partnering Programs

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The third type of CRM programs is partnering relationships between customer and marketers to

serve end user needs. In the mass markets, two types of partnering programs are most common:

co-branding and affinity partnering.

CRM Performance Evaluation Process

Without a proper performance metrics to evaluate CRM efforts, it would be hard to make

objective decisions regarding continuation, modification, enhancement, or termination of CRM

programs.

Another global measure used by firms to monitor CRM performance is the measurement of

relationship satisfaction. By measuring relationship satisfaction, one could estimate the

propensity of either partys inclination to continue or terminate the relationship. Such propensity

could also be indirectly measured by measuring customer loyalty.

CRM Implementation Issues

One of the most interesting aspects of CRM development is the multitude of customer interfaces

that a company has to manage in todays context. Until recently, a companys direct interface

with the customers, if any was primarily through sales people or service agents. In todays

environment most companies interface with their customers through a variety of channels

including sales people, service personnel, call centres, Internet websites, marketing departments,

fulfillment houses, market and business development agents,. For example, a customer who just

placed an order on the Internet and subsequently calls the call centre for order verification

expects the call centre staff to know the details of his or her order history. Similarly a customer

approached by a sales person unaware that she has recently complained about dissatisfactory

customer service, is not likely to be treated kindly by the customer.

However, the challenge is to develop and integrated CRM platform that collects relevant data

input at each customer interface and simultaneously provides knowledge output about thestrategy and tactics suitable to win customer loyalty and support. If a call centre personnel cannot

identify or differentiate a high value customer and does not know what to up-sell or cross sell to

him then it would be a tremendous loss of opportunity for the company. Although most CRM

software solutions based on relational databases are helping share customer information, they

still do not provide knowledge output to the front line personnel. As shown in Figure.6, CRM

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Knowledge

Output

Knowledge

Output

Knowledge

Output

Knowledge

Output

Knowledge

OutputData Input

Data Input

Data Input

Data Input

Data Input

solutions platform needs to be based on interactive technology and processes. It should assist the

company in developing and enhancing customer interactions and one-to-one marketing through

the help of suitable intelligent agents that help develop front-line relationship with customers.

Figure 6 . Information Platform for CRM

Since CRM implementation comprises a significant information technology (IT) component,

these companies have handed over the responsibility of CRM implementation to information

technology departments. They are focussed on simply installing CRM software solutions without

a CRM strategy or program in place. The lack of CRM strategy or CRM programs, would leave

the front-line people without any knowledge of what they should be doing with the additional

customer information that they now have access to. From a corporate implementation point of

view, CRM should not be misunderstood to simply mean a software solutions

implementation project.

36

Sales Group

Market

Development

MarketingCustomer

Operations/

Service

Call Centre

Internet

KnowledgeOutput

Data Input

Integrated Marketing

Information Platform

Information Content

Relational Databases

Decision Support System

Active IntelligenceBusiness Rules

Collaborative Communication

User Profiles


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Chapter 2: CRM and Related Concepts

Knowledge Management (KM) with focus on CRM

As Peter Drucker defined Information is data endowed with relevance and purpose.

To effectively implement a CRM solution it is very important to identify real knowledge about

different types of customers (Viz. Most valued customers, Most grow able customers, Below

zero customers) from plethora of internal and external data, figures, surveys, etc. A straightway

technique is to create a data warehouse, thereafter information which is required to effectively

implement principles of CRM, could be mined out of this data warehouse.

Marketing, sales after-sales people would be knowledge workers. Front office could be more

productive if they could utilize customer knowledge.

Metrics, ROI, Balance Scorecard method, benchmarking are some of the common technique

of KM system evaluation. KM implementation is the key to CRM.

Its a proven fact that 80% of organization revenues come form 20% of its customers; it becomes

imperative to design CRM solutions keeping in mind these most valuable customers and to

leverage 80% non structured data of about 20% of these most valuable customers.

Just as more tangible corporate assets like computer systems have a finite shell life, so too does

knowledge, it must be available at the right time to be able to act upon it. Retaining tacit

knowledge (derived from experiences, data and documents) means retaining the individual,

which is invariably not possible. It is possible to generate explicit knowledge from tacit

knowledge, but its a complex exercise. The key ingredient of this exchange is face to face

sharing of knowledge or virtual environmental tools like Lotus Notes, which can facilitate tacit

knowledge exchange. The choice of Customer Knowledge Management (CKM) architecture

should have a layered approach. Existing systems should be seamlessly linked with the proposed

layer. The choice for CKM system could be Web (Enterprise information portal) or a packaged

solution such as Lotus Notes, Microsoft solution.

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Role of CRM in the Context of SCM

In the context of SCM, where alliances and partnerships are keys to success, CRM plays an

important role in building long-term relationships. Apart from the end-users, it involves internal

employees, channel members and other external entities such as advertising agencies and

consulting organizations. The success of relationships depends upon sharing of savings from the

supply chain, which may be reinvested to further enhance its efficiency, and sustain the

competitive advantage.

The supply chain of tomorrow will look like a virtual organization, seamlessly integrated through

sharing data and savings as well. The bonding between partners will be closely held by CRM

practices.

ERP and CRM

Like ERP, CRM solutions focus on automating and improving business processes, albeit in

front-office areas such as marketing, sales, customer service, and customer support. Whereas

ERP implementation can result in improved organizational efficiency, CRM aims to provide

organizational effectiveness by reducing sales cycle and selling cost, identifying markets and

channels for expansion, and improving customer value, satisfaction, profitability, and retention.

While CRM applications provide the framework for embodying, promoting and executing best

practices in customer facing activities, ERP provides the backbone, resources and operational

applications to make organizations more efficient in achieving these goals.

Regain Management

The cost of acquiring a new customer is 9 to 12 times that of holding on to an existing

customer.-Philip Kotler

Consumer Life Time Value

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Quantifying the value of customers is absolutely essential in regain management. In fact, the

percentage of profit a company makes from continued sales to its own customer base is

consistently higher than the profit made on original sale.

Chapter 3: Technological Tools for CRM

Tools

Customer database

A good customer information system should consist of a regular flow of information,

systematic collection of information that is properly evaluated and compared against different

points in time, and it has sufficient depth to understand the customer and accurately anticipate

their behavioral patterns in future. The customer database helps the company to plan,

implement, and monitor customer contact. Customer relationships are increasingly sustained

by information systems. Companies are increasingly adding data from a variety of sources to

their databases. Customer data strategy should focus on processes to manage customer

acquisition, retention, and development.

Other Technologies that are used are as follows:

Electronic Point of Sale(EPOS)

Sales Force Automation

Customer Service Helpdesk

Call Centers

Call Centre helps in automating the operations of inbound and outbound calls generated between

company and its customer. These solutions integrate the voice switch of automated telephone

systems (e.g. EPABX) with agent host software allowing for automating call routing to agents,

auto display of relevant customer data, predictive dialing, self service Interactive Voice

Response systems, etc.

Systems Integration

While CRM solutions are front office automation solutions, ERP is back office automation

solution. An ERP helps in automating business functions of production, finance, inventory, order

fulfillment and human resource giving an integrated view of business, where as CRM automates

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the relationship with customer covering contact and opportunity management , marketing and

product knowledge, sales force management, sales forecasting, customer order processing and

fulfillment, delivery, installation, pre-sale and post-sale services and complaint handling by

providing an integrated view of the customer. It is necessary that the two systems integrate with

each other and complement information as well as business workflow. Therefore, CRM and ERP

are complementary. This integration of CRM with ERP helps companies to provide faster

customer service through an enabled network.

CRM A FRAMEWORK

Data Mining for CRM: Some Relevant issues

Data mining is an important enabler for CRM. Advances in data storage and processing

technologies have made it possible today to store very large amounts of data in what are called

data warehouses and then use data mining tools to extract relevant information. Data mining

helps in the process of understanding a customer by providing the necessary information and

facilitates informed decision-making.

Operational CRM solutions involve integration of business processes involving customer touch

points. Collaborative CRM involves the facilitation of collaborative services(such as e-mail) to

40

Traditional Approach to CRM

Customer Contact by

Telephone

Mail

In Person

Personal Selling

After Sales Service

Complaint Handling

Account Management Customer care

Customer Satisfaction

Web-Enabled & Integration

Approach

Customer Information

System

Customer Database

Electronic Point of Sale

Sales Force Automation

Automation of Customer

Support

Call Centres Systems Integration

Lifetime value of a Customer

Integration with

technology

(Web & Internet)


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facilitate interactions between customer and employees. All this effort produces rich data that

feeds the Analytical CRM technologies.

Information Requirements Of An Effective CRM Solution

The existing CRM Solutions

Delivering the 360 view requires automation to bring together all the data concerning a

customer. This implies the organization has to change from:

Mass Marketing Product Focus

Product Focus Customer Focus

Economies of Scale Economies of time

1 way communication Interactive

Response Time Real Time

Present CRM Alternatives

Present CRM solutions are offered by host of vendors that are to a great extent not industry

specific. While there are some vendors, who have come up with industry specific solutions, the

broad model around which the CRM solutions are built remain the same. Adopting a similar or a

look a like solution across industries is what causes major strain in servicing a customer.

Typical offerings of the current CRM solutions (such as Siebel, Oracle Apps or MySap.com, etc)

vary from solution to solution. However typical CRM offerings consist of:

41

Operational CRM Collaborative CRMAnalytical CRM

Customer

Fig.8 Interactions between CRM Technologies


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Customer Development Field sales, Tele sales, Internet Sales

Service Centre Call Centers, Field Service

Sale management and support Internet Customer Service

Market Analysis Service Interaction Centre

Internet, Tele marketing Business Partner Collaboration

Product and brand management

The Customer focused organization: CRM Model

The idea here is to develop systems that allow flexibility, work on not completely predefined

processes so as to enable front office to be proactive to each customer needs

The Mindset impact on CRM

A typical data warehouse will have the following components:

While developing a data warehouse one takes into account all the legacy and operation

systems. But typically sales teams could be managing leads on an excel worksheet. Sometimes

critical DSS input like Profitability Analysis itself may reside on a worksheet.

eCRM

What is eCRM?

42

OLAP Tool

Risk

Cube

F P & A

Cube

Mktg &

Sales Cube

Campaign

Mgmt

Data

Warehouse

Legacy & OperationExtract & Transfer


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eCRM provides companies with means to conduct interactive, personalized and relevant

communications with customer across both electronic and traditional channels. It utilizes a

complete view of the customer to make decisions about messaging, offers and channel delivery.

It synchronizes communication across otherwise disjoint-customer facing systems. It adheres to

permission based practices, respecting individuals preferences regarding how and whether they

wish to communicate with you and it focuses on understanding how the economics of customer

relationship affect the business.

eCRM Vs CRM

CRM is essentially a business strategy for acquiring and maintaining the right customers over

the long term. Within this framework, a number of channels exist for interacting with customers.

One of these channels is electronic and has been labeled e-commerce or e-business. This

electronic channel does not replace the sales force, the call Centre, or even the fax. It is simply

another extension, albeit a powerful new one, to the customer. The thrust of eCRM is not what

the organization is doing on the web but how fully the organization ties its on-line channel

back to its traditional channels, or customer touch points.

Why employ eCRM?

Companies need to take firm initiatives on the eCRM frontier to

Optimize the value of interactive relationship

Enable the business to extend its personalized reach

Company-ordinate marketing activities across all customer channels.

Leverage customer information for more effective emarketing and ebusiness

Focus the business on improving customer relationship and earning a greater share of each

customers business through consistent measurement, assessment and actionable customerstrategies.

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Review and Assessment of CRM solutions

CRM software applications embody best practices and employs advanced technologies to help

organizations achieve these goals.

Categories of CRM solutions

Any enterprise, which wants to implement CRM solutions, can choose from four categories of

solutions

Integrated applications suite

Interfaced applications bundle

Interfaced best of breed solutions

Best of cluster

Key requirements for CRM solutions

Some of the functional and technical requirements for CRM solutions are as listed below:

Business intelligence and analytical capabilities

Unified channels of customer interactions

Support for web based functionality

Centralized repository for customer information

Integrated work flow

Integration with ERP applications

Functional Components of CRM solution

CRM applications are a convergence of functional components, advanced technologies and

channels. Functional components and channels are described below:

Sales applications

Common applications include calendar and scheduling, contact and account management;

compensation; opportunity and pipeline management; sales forecasting; proposal generation and

management; pricing; territory assignment and management; and expense reporting.

Marketing applications

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SIEBEL

It continues to out market and out sell the competition. It is one of the few front office suite

vendors having vertical specific functions. Its functionality is compelling. It can be integrated

with most of the back office solution like SAP and Oracle. The solutions for the verticals

described above are discussed below:

For Consumer goods: a Siebel eConsumer goods offers eBusiness solution spanning the

entire demand chain from the end consumer, through the retailer and the wholesaler, to the

manufacturer. It has robust trade promotions planning functionality allowing users to

manage customer promotion plans and the funds to support them, while comprehensive

route planning functionality enables integrated account targeting.

For Financial Services: Siebel eFinance enables banking, brokerage, insurance, and capital

market organizations to establish and maintain long term profitable relationship with

consumers, small businesses, and corporate customers. The organizations can capitalize on

information captured during each customer interaction to more effectively cross-sell and up-

sell additional products and services.

For Healthcare: Siebel eHealthcare gives organizations the ability to streamline and

improve sales, member services, medical management, and network management services.

By using multiple distribution channels, including the Internet, call Centers, home office

staff and independent brokers, Siebel eHealthcare provides organizations with a single view

of their customers, thereby ensuring better service and improved quality of care.

For telecom service providers: Siebel eCommunications helps wireless, cable, and

Internet service providers to target and win the right customers, accelerate service delivery,

and provide service across all touchpoints. Siebel eCommunications embodies the industrys

best practices for generating accurate service orders, managing billing inquiries and

adjustments, and up-selling and cross-selling additional services

Some of Siebel employee-facing applications are:

Some of Siebel customer-facing applications are:

Some of the additional productsavailable in version 6.0

Siebel Call Center Siebel eChannelSiebel eBusiness Connector for SAP R/3

Siebel eMail Response Siebel eCustomer Siebel Communications Server

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Siebel Field Service Siebel eMarketing Siebel Distance Learning

Siebel Marketing Siebel eSales Siebel Global Enterprise Support

Siebel Sales Siebel eService Siebel Language Extensions

Siebel Service Siebel Wireless

Clarify

It offers customer service & support and field service suite; however its sales functionality is

immature.

Oracle

Oracle is betting everything on its thin, Web Based, centralized computing model. The Internet

computing architecture is compelling for connected non-mobile users; Oracle is rebuilding

functionality on the new platform and integrates its various acquired products. It offers a broad

set of functionality across e-commerce, front office and business intelligence applications.

Vantive

Vantive offers a compelling customer service and support and field service suite. The rest of its

front office functionality makes it suite more of a bundle. The solution is integrated with

PeopleSoft at the back office.

Table 2 Comparative Assessment of CRM Products for Vertical Specific Requirements

CRMApplicationRequiremen

tSiebel Clarify Oracle Vantive

Consumer Products

Category Management Available Available Available Available

Promotion Management Available Available Available Available

Demand Planning Available N.A. Available N.A.

Interactive Selling Available Available Available Available

Telecom Service Providers

Blended Sales & service contact

CentreAvailable Available Available Available

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Competitive Pricing Analysis N.A. N.A. N.A. N.A.

Integration with Billing System Available Available Available N.A.

Churn management Available Available Available N.A.

Commercial Banking

Contact Centre Available Available Available Available

Profitability Analysis Available Available Available Available

Integrated Targeting N.A. N.A. Available N.A.

Marketing Datamining N.A. N.A. Available N.A.

Pharma & Healthcare

Contract Management Available N.A. Available N.A.

Marketing AnalysisN.A. Available N.A. N.A.Disease Education System Available N.A. N.A. N.A.

Knowledge Management System Available Available N.A. Available

Case Study 1: Implementing a Technology- Based CRM Solution

The ICICI Experience

ICICI set up as Development Bank over four decades ago to provide products and services for

the corporate segment, diversified into the retail segment of the financial markets in the early

1990s.

In 1994, it established ICICI bank as a commercial bank that is flexible, innovative and prompt

in meeting customer requirements. In addition to the bank, the retail initiatives include Prudential

ICICI AMC, ICICI Personal Financial Services, ICICI Capital Services, and ICICI web trade,

Prudential ICICI Life Insurance, ICICI Lombard General insurance. This apart the retail

initiatives also include a plethora of web based businesses including city portals and various

other utility sites such as billjunction.com, icicimoneymanager.com, and magiccart.com, among

others.

The Retail Strategy

As part of plans, it is implementing various projects to establish world class CRM practices,

which would provide an integrated view of its customers to everyone in the organization. CRM

at ICICI involves increased communication between the virtual universal bank and its customers

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and prospects, as well as within the group itself. The underlying idea is to enhance every instance

of contact with the customer. ICICI believes that a true customer centric relationship can only be

accomplished by considering the unique perspectives of every single customer of the

organization. Hence the pressing need to put in place a technology enabled CRM solution.

The CRM Roadmap

CRM, at ICICI, is viewed as a discipline as well as a set of discrete software technologies, which

will focus on automating and improving the business processes associated with the customer

face to-face, call Centre, ATM, web, telephone, kiosk, bank branch, sales associates, etc so as

to allow ICICI to carry out cradle-to-grave customer management more efficiently. It should

allow ICICI to engage in one-to-one marketing by tracking complete customer life-cycle history.

To begin with it will automate process-flow tracking in the product sales process, and be able to

generate customized reports and promote cross selling. It will also enable efficient campaign

management by providing a software interface for definition, tracking, execution, and analysis of

campaigns..

Implementing CRM

A very detailed and comprehensive CRM action plan was developed based on the understanding

that CRM will require enterprise wide transformation.

The CRM Business Transformation Map below shows the various aspects of that change.

Product Sales Channel Marketing Service Customer

Product

Management

Place

Management

Promotion

Management

Channel

Management

Contact

Management

Customer

Management

Product

Performance

Place

Performance

Program

Performance

Customer

Revenues

Customer

Patterns &

Profitability

Customer

Lifetime Value

and Loyalty

Mass Sales Marketing Integrated Marketing Segment

Specific

CRM

48

BUSINESS FOCUS

ORGANISATIONAL STRUCTURE

BUSINESS METRICS

MARKETING FOCUS


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Advertising Promotion Campaigns Communications Marketing

Transaction

Processing

Data

Maintenance

Data Access Data Warehouse Data Marts Customer

Touchpoint

Systems

Interviews with key individuals throughout the organization helped identify different initiatives

that have been launched, all focused on CRM.

The next step in the planning process was a Gap Analysis. This analysis essentially compared

current stage against optimal relative to the five aspects of business, to identify and specifically

describe the gaps.

The CRM Business Cycle:

Understand and Differentiate

Organizations cannot have a relationship with the customer unless they understand them what

they value, what types of services are important to them, how and when they like to interact, and

what they wan to buy. True understanding is based on a combination of detailed analysis and

interaction.ICICI groups customers need to see that the company is differentiating service and

communication based on both what they have learned independently and on what the customer

has told them. At the same time, differentiation should be based on the value customer are

expected to deliver.

Develop and Customize

ICICI believes that the extent of customization should be based on the potential value delivered

by the customer segment.

Interact and Deliver

ICICI is strongly of the opinion that value is not just based on the price of the product or the

discounts offered. In fact, customer perceptions of value are based on a number of factors

including the quality of products and service, convenience, speed, ease of use, responsiveness,

and service excellence.

Acquire and Retain

The more ICICI learns about customers, the easier it is to pinpoint those that are producing the

greatest value for the organization. Successful customer retention basically involves getting it

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TECHNOLOGY


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right on an ongoing basis. And that is exactly what ICICI group aims to achieve out of its

CRM initiatives.

Successful customer retention is based very simply on the organizations ability to constantly

deliver on three principles:

Maintain interaction; never stop listening to customers

Deliver on customers value definition. Remember that customers change as they move

through differing life stages; be alert for the changes and be prepared to modify the service

and value proposition as they change.

Creating an Action Plan

The next step in the planning process was the development of a very detailed action plan.

While the complete plan might span three or more years, it was based on three-month

phases with clear deliverables that will demonstrate both progress and quick hits or

measures of success. The plan identified interdependent activities and should

comprehensively detail the time and resources required for each activity.

Another key factor for the planning process was the Leadership Action Plan. Advancing

on the CRM transformation map required significant organization change. This part of

the action plan helped assess the drivers and restraints of change and the organizations

readiness to assess the change.

Selecting and Implementing a Technology Based Solution

Technology

The success of the CRM initiatives was contingent on various decisions pertaining to technology.

Some of the key issues were: -

(a) Make or Buy: - The decision to buy was based on an evaluation of an identified set of

criteria. Some criteria were Functionality, Flexibility, Scalability, Fit with existing

architecture, etc. was decided to purchase an off-the-shelf CRM solution and customize it to

suit ICICIs requirements.

(b) From whom to buy: Some Criteria included were CRM expertise, Retail Finance Experience,

Credentials including financials, client list, life history, etc. A detailed Request for

Information (RFI) was sent to each of the shortlisted companies. After receiving the RFIs,

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another round of evaluation was done. After short listing two product vendors and system

integrators, reference calls were made to several of the past clients of all shortlisted

companies.

Processes

All processes were mapped on to product by understanding the details. During the course of the

process mapping, several opportunities for improvement were identified and implemented.

The Sales Process Pre CRM and Post Implementation of CRM

Lessons so far from the ICICI experience

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Call Centre Sales Agent Scrutiny Credit Agent Operations

Independent Databases

Database

Call Centre Sales Agent Scrutiny Credit Agent Operations


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If CRM involves optimizing product, price, place of distribution, promotion, sales and service,

why are so many companies struggling? Hasnt anyone really mastered the art and science of

CRM, and if not, why is it so difficult?

CRM is difficult because it is an enterprise wide initiative.

CRM is not a technology initiative. Many have confused CRM as a technology initiative, and

assigned the CRM implementation project to their information system or information

technology group. CRM conferences often equate to technology exhibits and demonstrations.

Technology is needed in order to implement CRM particularly the customization part but

technology is not the driver of CRM, or the solution to successful CRM implementation.

CRM is not exclusively a marketing initiative. Many organisation have merely equated CRM

with customer focused marketing, or data-driven/database marketing. CRM results in more

effective, data driven marketing efforts; CRM requires marketing experience. But CRM is

strictly not a marketing initiative.

CRM is not exclusively a sales initiative. Similar to marketing, CRM is often lodged within

the sales department. The sales-force, after all, is extremely close to their customers

understanding their needs and wants., and trying to fulfill them. Sales, however, is just one

functional area that can benefit from CRM, and that is necessary for effective CRM.

Chapter 4: Organizing for CRM

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Assessing Need

How do you know your business requires CRM?

It is very easy for a business to get caught in the latest customer trap when it is being driven bythe information technology (IT) market. Every business does require CRM; the question is to

what level?

Trends

Many businesses are pushed by the current trend to change their business strategy, especially

around CRM. There are basically three trends that effect a business:

Consumer

The customer is an ever-changing image, to be really successful with CRM you must recognize

the customer trends that are effecting the business.

If a business does not understand a customer profile and the changes that have occurred then it is

not possible to provide true customer relationship management.

Products

It is the business providing the products that meet the changing customer trends. Products need

to be reviewed constantly perhaps enhanced or even removed. Supermarkets are a perfect profile

to look at for viewing product trends, they constantly add and remove products and they

constantly view customer buying profiles and set out the pattern of the store to meet the strongest

buying trend. This may not always be by using the latest technology, it could be by just

reviewing shells at the end of the day, but the super market is at the minimum watching for the

two basic trends in CRM.

Technology

Ensure that the business is ready to install the new technologies, is the customer data upto it, or is

it time to start again? Do you need to review every technology being used or just one area. Will it

assist the business, is it going to grow with the business requirements or is the technology just

another trend? Relationship management should not be an alternative to existing

functions/technology; it could be a logical extension to enhance those in existence, though it

could radically change some of the operational processes.

Is your Business ready? Are your customers Ready?

What are the costs, monetary, time, people and long-term issues?

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Does CRM really matter?

Whatever the business activity is all companies have to ask themselves is CRM the real factor for

their company to succeed. Some customers do not need long-term relationship with their

suppliers; therefore only minimal information is required from that customer. That however is

still a form of CRM. Other companies have high quality and high value customers that they need

to know information about, they need to provide exceptional service, the pedigree of CRM.

Whatever the business is, if it has customer it has to ask, does customer relationship management

matter? What does it man to them in business terms? At what cost? What is the overall loss if not

adhered to?

CRM: Yes it does really matter the strategy needs to last, be constantly reviewed and can

evolve over time.

Employee Empowerment and CRM

The Case of Hewlett-Packard India

Relationship between Employee Satisfaction, Customer Satisfaction & Market Share

54

Market

Share

Productivity

Customer

Satisfaction

Cost Of

Quality

Employee

Satisfaction

Satisfaction with

Right Skills

Satisfaction

With Manager

Job

Satisfaction

-ve

-ve

MarketShare

40%ESS


55/77

1990 91 92 93 94 95 96 97

Initiatives for Employee satisfaction

A demotivated, unenthusiastic and unhappy employee will never care for the customers. Also

organizations willing to spend money when they are doing well should spend on employees more

rather than less when things get bad. An employee satisfaction survey should be carried out on a

regular basis.

Hewlett Packard (HP) Case

HP sells its products through its channels. Whenever the customer purchases a product, and there

is an issue to be resolved, the point of contact is the front line team. It handles the usage-related,

the application related and the real product related issues. The backend team handles the up

gradation issues. The partners provide the hardware support. The sales and services are provided

by DPSPs and the ASPs only. Typically in a month, the total number of customer calls logged

in at HP is 21,000 out of which 4600 are through web support, 1270 e-mails and 15,000

telephone calls. They use automated call distribution software, which also enables to track the

particular history of the customer. The service providers are assessed continuously. It is a

challenge to motivate engineers who are the employees of the service providers and are not HP

employees. The engineers/service providers performance is monitored on:

Turnaround Time

Number of parts requested per call (Multiple Part consumption)

Closing the call

55

25%

35%

30%

CSS

CSS ESS Market Share


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Customer satisfaction

Repair rate

Effective handling of customer escalations

HP has allocated points for each of these parameters for partner performance measurement. In

case the partner performance falls below the desired level of points, then there would be

deduction in the reimbursements of that reseller. However if he exceeds the given point scale

then he qualifies for additional reimbursements which are offered as rewards.

HP contacts all customers, who are not happy with the service, and through the partners it is

attempted that certain steps are taken so that the customer is happy. The training program for the

partner is also regularly revived.

There is also a Reward 1000 plus program where there are points awarded. There are points for

various aspects such as training, quiz bulletin, customer feedback, customer service, re-repair

rate. The top contributors among the resellers are identified and are sent for training or

entertainment apart from monetary incentives.

So at HP, there is synchronization of the employee satisfaction and customer satisfaction process

to ensure a higher market share.

Chapter 5: Status of CRM In India

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A Survey of Service Firms

Successful implementation of CRM requires a strategic approach, which encompasses

developing customer centric processes, selecting and implementing technology solutions,

employee empowerment, customer information and knowledge generation capabilities to

differentiate them, and the ability to learn from best practices.

Research Objectives

The current research was aimed at determining the approach being adopted by businesses in

India for relationship marketing. The research focused on the following major issues:

Do managers in service firms believe that their processes are customer centric?

Do they select technology on the basis of an understanding of customer needs?

Have they empowered their employees to deliver superior services?

Do they have a customer knowledge strategy? How well do they manage their customer

relationships?

Methodology

The research was exploratory in nature and adopted a two-stage process. During the first stage,

50 managers of service firms operating in India were surveyed through respondent administered

questionnaires. These managers belonged to the following three categories:

a) Hospitality Industry encompassing hotels and restaurants

b) Information technology and

Telecom industry which

included software firms and

telecom providers

c) Financial Services included

commercial banks andmutual funds

The survey focused on the quality and the customer centric processes, technology selection,

employee empowerment, and customer knowledge strategy to gauge the status of CRM practices

in these firms.

57

I.T &Telecom

36%

Finance

35%

Hospitality

29%

Respondent Profile


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In the second stage, managers of select firms in each category of services were interviewed to

understand the relationship marketing practices adopted by them. These interviews explored the

following issues:

1. What are the various CRM initiatives undertaken by the firm?

2. How do they develop these programs?

3. How do they measure the effectiveness of these programs?

4. How successful are these programs in retaining customers?

Analysis of Findings

Processes

The managers reported a wide divergence with respect to the adoption of quality assurance

across the three sectors. The I.T and telecom sector is at the forefront of adopting a formal

quality management organization. Most of the players in the hospitality and the finance sector

report having some methods in place to ensure quality management initiatives. About 8% of the

overall sample have indicated the absence of any quality initiatives in their organizations.

At the broad level, most managers believe that they understand most of the interactions between

58

0%

48%52%

4%

35%

62%

15%

50%

35%

0%

10%

20%

30%

40%50%

60%

70%

Some Most All

Finance Hospitality I.T & Telecom


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customers and their business processes. About 50% of them have indicated that they have a full

understanding of all possible interactions between customers and their business processes.

Customer-centric marketing emphasizes understanding and satisfying the needs, wants, and

Documents

Vivek Bohra IIm Projecton CRM