A PROJECT REPORT ON CUSTOMER RELATIONSHIP MANAGEMENT
AT ADDMARC ( AN ADVERTISING &MARKETING CO.)
A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF REQUIREMENT FOR THE DEGREE O F MASTER OF BUSINESS ADMINISTRATION (Industry Integrated) MADURAI KAMARAJ UNIVERSITY, MADURAI By VINISHA VASHISTHA Reg No.: A7754274 Under the guidance of
Mrs.Gunjan Rana RAI BUSINESS SCHOOL Mathura road, New DelhI DEC 2008 Rai Business School
Certification This is to certify that the project report at
ADDMARC (ADVERTISING &MARKETING CO.)
Submitted in Partial fulfillment of the requirement for the Degree of MASTER OF BUSINESS ADMINISTRATION (Industry Integrated) To MADURAI KAMARAJ UNIVERSITY, MADURAI VINISHA VASHISTHA Under my supervision and guidance and that no part has been submitted for the award of any other Degree/Diploma/fellowship or similar title or prizes
Faculty Guide Signature : Name :Mrs.Gunjan Rana Signature & Seal of the learning center
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STUDENT ‘S DECLARATION I hereby declare that the Project Report conducted at
ADDMARC (Advertising & Marketing co.) Under the guidance of Mrs.Gunjan Rana Submitted in Partial fulfillment of the requirement for the Degree of MASTER OF BUSINESS ADMINISTRATION (Industry Integrated) TO MADURAI KAMARAJ UNIVERSITY, MADURAI Is my original work and the same has not been submitted for the award of any other Degree /Diploma/fellowship or other similar titles or prize
Place:
Date: RAI BUSINESS SCHOOL
VINISHA VASHISTHA
Reg. No.
: A7754274 3
Project Report At ADDMARC (Advertising & Marketing co.)
Submitted by: VINISHA VASHISTHA MBA-III(MKU)
Reg. No.-A7754274 Under the guidance of :Mr. Mahender Gera Regional Manager, ADDMARC (Advertising & Marketing Co.) Sant Nagar, Nehru Place
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ACKNOWLEDGEMENT
I wish to express my gratitude to ADDMARC (Advertising & Marketing Co.) management for giving me an opportunity to be a part of their esteem organization and enhance my knowledge by granting permission to do summer training project under their guidance. I am grateful to Mr.MAHENDER GERA my Company guide, for his invaluable guidance and cooperation during the course of the project. He provided me with
his
assistance
and
support
whenever
needed that has been
instrumental in completion of this project. I would also like to thank my career management cell helped in the accomplishment of this work and obliged for her consistent support. The learning during the project was immense & invaluable. Our work basically included the study of customer relationship management. The present report is an amalgamation of our thoughts and our efforts to study the customer so that managers may develop better approaches in dealing with their customers, and form mutually rewarding relationship in the future. Finally through this acknowledgment I would like to express my sincere gratitude towards all those people who have been inspirational and instrumental in drafting this assignment.
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TABLE OF CONTENT Acknowledgement Abstract 1. Introduction
ADDMARC,
2. client
3. Objective
4. Methodology Primary Data Secondary Data 5. Unit Linked Insurance Policy
6 .Mutual Fund
7. Types of Mutual Fund
8. ULIP Vs Mutual Fund RAI BUSINESS SCHOOL
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9. Mutual Fund Analysis
10. Survey
11. Recommendations
12. Bibliography
13.Annexure
ABSTRACT:
Customer Relationship management (CRM) is a software package that can be used to collect information and collaborate internally across a corporate organization in order to improve interaction with customers.
There are two elements, which make up CRM: one is interaction with the customer, which can be through Internet or through traditional methods such as the telephone. The second is for a company to utilize the information gathered from such interaction to market their products better. RAI BUSINESS SCHOOL
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The second element involves using the Internet or, more accurately corporate intranets, so that the information is widely available within the organization.
The
software packages, which make up CRM, thus, help a company identity that its customers are and their spending patterns.
CRM, along with supply chain
management, have become the leading tools of the so-called new economy, which is supposed to have greatly enhanced productivity .
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INTRODUCTION: Addmarc, an advertisement and marketing company in the field of promotional services of restaurant and food chain outlets through our services we partner you in the hospitality of your organization and your employees.
With reference to our conversation here we are offering you the best & most economical package.
ABOUT ADDMARC: RAI BUSINESS SCHOOL
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Addmarc. A Canadian concept based advertising & marketing co.
WHO WE ARE ? We are an nine year old innovative marketing services team of professionals and primary objective is to assist ventures essentially with in the services industry comprising hotels, restaurants, resorts, multiplexes and leisure park.
WHY WE ARE? • The hospitality services industry is possibly the fastest growing business vertical in India today to quote and apt marketing cliché demand far out strips supply in any of the services comprising this business vertical. It is projected that this demand shall continue to grow exponentially over the next ten years. This is eventually expected to result in various specialist with in the field being sought fore various subheads that make the services. Services industries as a whole. Profitability and continuous revenue planning being the key behind any venture, We are at Addmarc seek to address the key component in the meeting on of the marketing services requirements the key differentiated between a good venture and profitable one. • At Addmarc we are completely alert to fact that each Clint is special and each Clint present us we can opportunity to continue find tune and bone our marketing skills to realize customer delight and satisfaction in every way possible.
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• At Addmarc, we understand the value behind creation of relationship and associations which extent far beyond the professional ambit. We firmly believed a satisfied customer is veritable mouthpiece for other prospective clients. • AT Addmarc, they put our actions to match your recommendations this is our biggest strength and is the very basis of our many successful marketing tie up. • We take extreme care in choosing our associates.
Our clienteles
We are having more than fifty national and international clients, our major clients are
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Out Other Clients. Pind baluchi
Picardli
Rice bowl Mystery guide
Taste of china Shankalp Asia kitchen
&
Many more……………………….
Details : Detail of card Feature of meal card:-
• In just Rs 999/- you will get meal of worth Rs around 10000/-. • It is a freely transferable card means either you or on behalf of you anybody can use this card. • The validity of this card is complete one year from date of purchase. RAI BUSINESS SCHOOL
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• Four mega bumper card of Rs 250/- each ( Rs 1000/- ) absolutely free. • All restaurants are on prime location of Delhi and NCR.
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MONTH OFFER•
Free twenty eight coupons for diner and lunch meals with buy one get one offer.
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• Free four bumper offer coupons of worth Rs 250 each.
Objective To know the satisfaction level of partners and external customers of ADDMARC (Advertising & Marketing Co.)and to Capture the essence of genuine relationship as perceived by them so that managers may develop better approaches in dealing with their customers, and form mutually rewarding relationship in the future.
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Methodology The methodology for this project includes four phases: •
Study of the concepts through various literature available on the subject.
•
Interaction with the corporate unit to get relevant information and exposure on the subject.
•
Primary survey through tele-calling and understanding their concerns.
•
Analyses of data to derive Partnes and External customers Satisfaction.
•
Primary Data Collection
A structured questionnaire was used to collect data from the interviews method was used in order to get the questionnaire answer. As respondent played an important role owing to their interaction
•
Secondary Data Collection
The secondary data was collection from various magazines, journals, newspaper and books written by experts. The magazine referred to be Business India,
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Business World, Newspapers like The Economic Times, The Times of India. The secondary data
collected then was used in formulation of the questionnaire, which was then used to collect primary information.
TYPE OF RESEARCH The research was descriptive in nature. An idea was to gain an insight into the problems that the CRM to which working in the competitive environment. The project would have remained incomplete without the suggestions of the working in their companies regarding the effort required to serve the sector. LIMITATIONS The sample size was limited by the time constraints. The project was required to be completed within duration of (OCT 2008–DEC2008).
SCOPE FOR FUTURE STUDY
1. The project study has been done taking a very small sample size. A detailed project can be undertaken for the same. RAI BUSINESS SCHOOL
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2.
The growth of the CRM sector has been accompanied by efforts aimed at
evovling an appropriate regulatory framework. WHY AND HOW CRM? •
Why Do Companies Need CRM ?
Companies need to establish strong customer relationships by acquiring in-depth knowledge of the customer’s requirements and expectations. The idea is to use the information to meet customer needs better, build loyalty, and increase efficiency through call centers and other marketing activities. The advent of the Internet as a medium has enabled a reduction in interaction costs among customers and companies. The need for personalized information, faster service, and value addition is forcing both product and service companies to meet or exceed expectations levels. As a result, companies consider CRM as an integrated effort that automates business, shrinks time and distance across the supply chain to serve customers .
•
How Do Companies Choose the Right CRM tool?
Every company has different legacy systems – computer-related infrastructure installed at different points in time – and various levels of data integration, that make CRM tools difficult to define or apply. Ideally, a CRM package should cut costs and encourage communication.
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different approaches to CRM. Before applying CRM to their business, organisations need to check the compatibility of the software with their existing application. The Four R’s of Marketing There are four other concepts that must be taken just as seriously in order to achieve long-term success. These represent a more current view of what is involved in achieving marketing success. The four R’s of marketing – retention, relationships, referrals and recovery are of critical importance in the establishment of a successful marketing program. Rather than focusing management’s attention on the tools of marketing, this view requires that management understand what will lead to long-term success and increased shareholder value.
Building Customer Relationship s Retention
Referrals
Recovery
The Four R’s of Customer Relationship Management
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•
Retention involves keeping those customers we want by meeting and exceeding their needs. Customer retention is far less costly than customer acquisition. The focus must be on the voluntary retention of customers. Retention of customers because they have no alternative or by locking them into a reward program does little to foster long-term relationships. In fact, it does the opposite. Quite often, as soon as they can break free from a situation in which they feel trapped, these customer ill take their business elsewhere.
•
Relationships are likely to exist when
customers voluntarily or even
enthusiastically do business with a firm for extended periods of time. Relationship building means getting close to customers in an attempt to understand and serve them better. Relationships, by their very nature, require trust, commitment, communication, and understanding. In the everyday mayhem of business life, it is easy to put off calling a long-time client or making relationship building a priority. However, it is necessary to place as much importance on relationships with customers as we do on any other aspect of the business. •
Referrals address the word-of-mouth effect that results from customer satisfaction – the powerful message that satisfied customers will convey to others. When customers are completely satisfied with a service or product, they
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are more likely to spread the word. People are more likely to try something new if it is highly recommended by a trusted colleague, friend, or family member. Not only will they come back to buy from us again, but they will bring their friends and family members. •
Recovery from poor customer service customer service must also be an important
component of managing customer relationships. Mistakes happen. That is a fact of life and business.The unpredictable will undo the best-laid plans and leave customers and employees feeling frustrated. However, mistakes can be turned into opportunities to impress customers and win their loyalty. Recovering from a mistake can reaffirm a loyal customer’s commitment as well as demonstrate to a new customer your pledge to customer service and satisfaction. In order to do this, employees must be empowered to deal with gaps in service and product quality when they occur. Customers become frustrated when they have to go through several layers of management and wait for replies to trickle back through the system before problems are corrected.
•
Not All Customers Are Valuable
Not all customers represent the same value to a firm. In fact, companies serve a wide range of customers, from those who produce very little revenue to those who produce a great deal. But many companies have no idea who their customers are or how valuable RAI BUSINESS SCHOOL
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they are to the business. The prevailing wisdom today in business is that greater attention should be paid to satisfying the most valuable customers. If we are going to protect customer relationship, then we should start with protecting those that have the greatest potential value. But many firms do not know where to begin in assessing customer value. That is why some companies are spending time and money to determine which customers are costing more than they are worth. Technology today allows many companies to track sales and gain an improved understanding of their customers. Making the effort to assess the value of individual customers will pay off if the company uses the information to determine how much to invest in building a relationship with a customer or customer segment. The logical outcome making such an assessment is that there will be some customers on whom the company will lavish attention and whose relationship will be protected almost at all cost, and other customers whose connection to the firm is deemed much less valuable and who may even be encouraged to end their relationship. At first glance, the idea of helping or encouraging customers to defect seems a rather harsh step to take, one that may even prove detrimental to a company; however, it can be a means to improved profitability for the company and higher quality service for the best customer. Shedding those customers who are genuinely not paying their way makes considerable business sense. One critical problem, however, is that most RAI BUSINESS SCHOOL
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businesses are ill-equipped to identify such customers. And even if they could identify these customers, the concern remains that these customers may spread negative word of mouth after they have been “dropped” by the company. Most companies have customers who spend little but cost as much to serve as those who bring in greater revenues. For example, in our research with financial institution, the customers who represent the lowest value to a bank in terms of their deposits and fee-generating products are generally also the most costly to serve. They may also be the type of customers who will continue to use the bank’s branch network, rather than ATMs and other technology, and be most demanding of the time of employees. Credit card holders also vary greatly in the extend to which they use their cards and how they choose to pay their balances. Some customers use their cards minimally each month and pay their balance as soon as they receive the monthly statement. These customers represent a small source of revenue for the credit card company since they are light users and pay no interest. The administrative costs associated with these clients are the same as the costs to serve clients who are heavy users and carry over balances, thereby earning interest for the bank. The profits realized from each of these two groups are different because of their usage rates and payment patters. What can the credit card company do? There are several alternatives, including increasing usage rates light users and minimizing spending on these customers. As well, it may be possible to increase usage further among heavier users, which will offset the costs RAI BUSINESS SCHOOL
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associated with light users. Cards issued with a fixed annual fee dater light users, who will not benefit by having the card because of their low spending levels. Consciously encouraging the defection of the unprofitable customers unprofitable is a decision that require information about customers and their spending patterns over time. It also requires a better understanding of the customer’s spending potential. Many businesses will serve young clients for many years without realizing substantial revenues. However, these companies often attempt to retain those clients because of their potential as long-term, profitable customers as they mature and their earnings increase. An example is the bank that carriers a student’s small balances for years in anticipation of the individual’s greater needs when he graduates and is employed. Because of this potential, businesses cannot make broad-based decisions to “lose” the bottom x% of their customers. Rather, they must make that decision based on knowledge about the customer’s past and present spending potential. Attempting to deliver an appropriate level of customer service to a customer’s estimated value to the company is a risky strategy. In the first place, unless the company has very good information on the true value of the customer, the risk is very real that it could be wrong in labeling a customer “low value”. In such a situation, the strategy adopted to “serve” the low-value customer may involve reducing service levels to the point where the customer may decide to take this or her business elsewhere, or charging fees or higher prices to such customers so that they either become profitable RAI BUSINESS SCHOOL
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or are encouraged to leave. The danger, of course is that the firm may offend customers who are in fact more valuable than available data may indicate, or create a public relations problem because customers voice publicly their views on how they are being treated. Tailoring levels of customer service to some estimate of customer value is a challenge for a business and a dangerous strategy to implement. Clearly, a company really does not want to maintain close relationships with all of its customers, but deciding which ones to maintain and encourage and which ones to cut loose or ignore is not an easy task. Such a decision may be made for the wrong reasons and in the absence of full information. The concept of value for a customer is very important as companies consider how to implement a customer relationship strategy. Customer Relationship as Asset What is the value of a solid customer relationship? How can employee satisfaction provide insight into future financial performance? More and more firms are asking these questions as they attempt to measure non financial or soft assets and attribute economic value to them. This is happening at a time when intellectual capital, human resources and training are more important to some companies than the value of their tangible assets. For example, a small IT firm made up of capable, hardworking, creative people will want to evaluate the company based on its potential to deliver quality RAI BUSINESS SCHOOL
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services and solutions to their clients rather than on the value of the hardware and software used to create the solutions. The services provided by the company will be valued by its clients as well as the relationships forged through the interaction and quality work done. For the most part, these solutions are the result of the people who work on the problems rather than to the equipment and facilities used to produce them. In other words, it is the abilities and quality of the people to produce results as well as their willingness to provide high-quality service and form relationships that will differentiate thee companies. To be fair to these types of businesses, more attention should be paid to the measurement of intangible assets when valuing the firm. When a company is sold or when it issues an IPO, the marketplace and investors apparently have little difficulty placing a value on the firm’s intellectual capital and its potential for future profits. What is required to provide a better understanding of the true value of the future potential of a company is more than financial measures. In this context, a traditional accounting approach is inadequate because it fails to take into account the kinds of measures that are of critical importance to those who are involved in marketing and who are focused on the long-term value of the customer relationships that the company has built. It is the customer who is responsible for the future earnings of the company. It is essential, therefore, that the company place a value on the longterm stream of earnings produced as a result of customer relationships.
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Evert Gummesson, Professor of Marketing at Stockholm University, speaks of intellectual capital being divided into two components human capital (the value of the employees who work for the firm and what they bring to the company, including their knowledge, motivation, and network of relationships) and structural capital (the embedded knowledge of the firm; the relationships the company has with its customers and others, its corporate culture, systems, contracts, and brands). Human capital leaves the firm when an employee resigns or retires, structural capital goes on insofar as the company’s relationships and brands have enduring value; a value, unfortunately, that has rarely been calculated. The technique is used to weight the factors between quality and price resulting in equilibrium line between quality and price showing what the customer deems a fair value.
PERCEIVED FAIR VALUE PRICE
QUALITY
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Customer Value Map Within each competitive set, the company with the best value wins . The slope of the line is critical to CRM strategy. If the organization happens to be in a category that has destroyed the importance of quality and brand [creating a steeply sloped perceived fair value market], it is a commodity, a price game, and unless it changes the way its targeted customers weigh the factors, nothing but the lowest price will win. What’s Important? A number of lessons learned from this chapter merit emphasis at this point. Calculating or determining the long-term value of a customer is important for a firm. First, it demonstrates to employees that the firm is focused on cultivating customer relationships so as to maximize the long-term payback that flows from such relationships. It sends a very important message that, by engaging in behavior that in any way puts customer relationships at risk, the employee is jeopardizing a very important flow of revenue not only form the customer directly but from any business that he or she might influence. Secondly, determining the value of a customer may influence a decision regarding those customers with whom the company wishes to establish and maintain relationships. It has the potential, once a concerted effort is made to place a value on a customer relationship, to identify those customers where long-term potential is very RAI BUSINESS SCHOOL
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good and those where the most concerted efforts will relationships in the customers’ eyes. Other authors suggests that where customers do not really want to get very close to a company, the company should examine what value or benefits the customers perceive they are getting now or could potentially get from such a closer association. The conclusion is often that the company has not done a very good job of demonstrating that additional value can be created for the customer by “getting closer.” The challenge is to create more ‘relational benefits,” as customers are generally already aware of the functional and process benefits that the company can offer. In fact, the fact that these customers are not interested in deepening the relationship suggests that they are aware of and satisfied with the benefits created at this more functional level. The challenge to the company is to raise the bar and to make the softer, relational benefits more relevant for the customer. Let’s reconsider for a moment the implications of implementing technology in an effort to add value for consumers. Customers generally appreciate the convenience value that is created by the introduction of many new technologies. But there is an important shortcoming: by allowing the customer to deal with us entirely through technology, we are removing human contact, the opportunity for conversation and the opportunity to “read” a situation.
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Pyramid Model: The top-down pyramid is a model for planning and executing a CRM initiative.The underlying support for the pyramid is “Customers,” a constant reminder that
profitable customers are the core of a company’s existence. It ensures that companies achieve corporate revenue and profit goals by aligning the entire organization around customers to deliver real business value. Those that count their CRM investments a success have learned that it’s essential to view CRM as an enterprise-wide initiative that requires executive-level involvement and strategic alignment from the beginning. Secondly, this model puts technology in its proper place as an “enabling” platform. The CRM technology implementation becomes a natural extension of the company’s vision and strategic direction and supports the organizational structure and business processes. Customer Value Management (CVM): The Driving Force Behind CRM
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Success The aim of all businesses should be to create a value proposition for customers that are superior to and more profitable than the competition. The value proposition can be specifically described in terms of:
The target customers;
The benefits offered to them and;
The price charged relative to the competition.
The value creation process is a critical component of CRM as it translates business and customer strategies into specific statements of what value is to be delivered to customers and, consequently, what value is to be delivered to the supplier organization. It consists of three key elements:
Determining what value the company can provide to its customers;
Determining the value the organization receives from its customers
By successfully managing the value exchange, maximizing the lifetime value of desirable customer segments.
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•
CRM: ADDMARC (An Advertising & Marketing Co.)
ADDMARC has transformed itself into a technology intensive services group in the last decade. To achieve its long-term goal of being in a position, ADDMARC has taken a series of initiatives.
As part of the 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 ADDMARC involves increased communication between its customers and prospects, as well as within the group itself. The underlying idea is to enhance very instance of contact with the customer. ADDMARC believes that a true customer-centric relationship can only be accomplished by considering the unique perspectives of every single customer of the organization.
•
THE CRM ROADMAP
It should allow ADDMARC to engage in customer service 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. From an architecture perspective, the enterprise-wide CRM solution should seamlessly, integrate non-transactional related customer information housed in the Front-Office with the transactional information housed in the Back Office. Creating the RAI BUSINESS SCHOOL
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enterprise CRM strategies required the combination of nine distinct steps as shown below:
STRATEGY
INTELLIGENCE
PROCESS
AUTOMATION
ORGANIZATION
DATA
TECHNOLOGY
Source : "Creating the Enterprise CRM strategy" by Aslam Handy, Chief Technology Officer, Dialogos.
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By combing these nine steps can one really start listening to the customers, and understand what they are saying, may be even in real time. Once that is achieved, profits begin to follow as optimization techniques are applied. Only then will the two crucial goals for a successful business-case driven project be achieved, viz. 1. Effective change management 2. Technology-enabled evolution.
ADDMARC recognizes that customers make buying decisions based on more than just price.... more than just product. Customers make buying decisions based on their overarching experience that includes product and price-, and price,and sales, service, recognition and support. If ADDMARC can get all of those factors right-consistently-we will be rewarded with ongoing customer loyalty and value.
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IMPLEMENTING CRM
A very detailed and comprehensive CRM Action Plan was developed based on the understanding that CRM will require an enterprise wide transformation. The CRM Business Transformation Map below shows the various aspects of that change. There are five inter-related areas. These include: 1. Business Focus 2. Organizational Structure RAI BUSINESS SCHOOL
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3. Business Metrics 4. Marketing Focus Technology. The key to building the CRM action plan was in understanding where the organization stood relative to each of the five aspects of change. Interviews with key individuals throughout the organization helped identify different initiatives that have been launched, all focused on CRM. While all of the these initiatives may have merit, failure, to address the total business transformation requirements can lead to very short-lived success. THE CRM BUSINESS CYCLE a)
Understand and Differentiate
ADDMARC Group's customer need to see that the company is differentiating service and communications based both on what they've leaned independently and on what the customer has told them. At the same time, differentiation should be based on the value customers are expected to deliver. b)
Develop & Customize In the product-oriented world of yesterday, companies developed products and
services and expected customers to buy them. In a customer-focused world, product and channel development has to follow the customer's lead. Organizations are RAI BUSINESS SCHOOL
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increasingly developing products and services, and even new channels based on customer needs and service. ADDMARC believes that the extent of customization should be based on the potential value delivered by the customer segment. c)
Interact & Deliver ADDMARC 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 services, convenience, speed, ease of use, responsiveness and service excellence. d)
Acquire & Retain Successful customer retention basically involves getting it "right" on an ongoing
basis. And that is exactly what ADDMARC aims to achieve out of its CRM initiatives. Successful customer retention is based very simply on the organization's ability to constantly deliver on three principles : •
Maintain interaction; never stop listening.
•
Continue to deliver on the customer's definition of value.
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•
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. And so the cycle continues.... As a cycle, the stages are interdependent and continuous. As one moves from one stage to the next ADDMARC hopes to gains insight and understanding that enhance the subsequent efforts. CUSTOMER BASE : It is not possible to have a relationship with someone you cannot identify, so it
is absolutely critical to 'know' your customers. This database is a repository for the information needed to have a mutually rewarding relationship with customers. For purposes of building such a relationship, it includes these 3 categories of information. •
Basic information such as customer name and address
•
Relevant information about that individual such as age and income level, family status and buying intention. This is dynamic and subject to change.
Data captured whenever the customer makes a transaction. Every customer purchase presents you with an invaluable opportunity to enhance your understanding of how your customers like to do business.
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Customer Media The strongest customer Media – these 3 elements are the heart and soul of deep & lasting customer bond. To create a relationship means one has to : •
Know the customers likes and dislikes – his psyche (database)
•
Keep up a continuous learning process about the customer (dialogue)
•
Have some way of communicating directly with them (direct media)
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WHAT IS THE RESULT? A successful "loyalty Programme"!
Success of any customer relationship
programme depends on the support of a database, use of direct media, such as customized direct mail, newsletters, monthly statements and a solid reward system that builds continuously. We could define this as – making each purchase a customer makes, increase the value of the next purchase to that customer.
In return the
company profits by increased sales to such customers who also act as brand ambassadors. ADDMARC Experience
i. CRM is not a technology initiative. 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. ii. CRM is not exclusively a marketing initiative. It results in more effective, data driven marketing efforts. iii.
CRM is not exclusively a sales initiative. It is just one functional area that can benefit from CRM.
iv.
CRM is not exclusively a service initiative. It is again a functional area only .
Thus it is essentially an enterprise – wide initiative.
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•
The Broad View (Readiness of the Company)
Before embarking on a CRM program, it is imperative to search your (here, refers to the company) souls. An exercise needs to be administered to a number of people at different levels and in different areas of your company. Also a representative group of customers may be involved as there is enormous value in hearing what your customers say about your readiness. Subjective answers should be sought for the following questions: Q.1
How well can your company identify its end user customers?
Q.2
Can your company differentiate its customers based on their value to you and their needs from you?
Q.3
How well do you interact with your customers?
Q.4 How well does your company customize its products and services based on what it knows about its customers? Answers to the questions will provide your locus stand vis-à-vis your intention and preparedness of a CRM program. It is also extremely essential to understand the various gaps that need to be plugged. So the next logical step is:
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•
The One-to-One Gap Tool:
This exercise to be administered to employees at various levels and functions, is designed to capture a robust analysis of your company. It should also be given to a representative group of customers, with the language tailored opportunity, in order to expose the gap between internal and external perceptions: A)
Process
•
Does the company have established quality assurance processes?
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Are the company's business process customer centric?
B)
Technology
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Does the company take customers' needs into consideration when selecting and implementing technology?
•
Does the company provide its employees with technology that enables them to help customers?
C)
Knowledge Strategy:
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Does the company maintain a strategy for collecting and using information about customers?
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•
How effectively does the company combine information on customers with its experiences to generate knowledge about its customers?
D)
Partnerships
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How does the company select its partners?
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Does the company understand the relationships among its customers and partners?
E)
Customer Relationships
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How effectively does the company differentiate its customers?
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What steps has the company taken to improve the total experience of its customers?
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How effectively does the company measure and react to customers' expectations?
•
How effectively does the company understand and anticipate customer's behaviour? F) Employee Management
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To what degree are employees empowered to make decisions in favour of the customer?
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Has the company formally linked employees' rewards with customer – centric behaviour?
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F)
Competitive Strategy
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To what extent does the company understand how customers effect the organisation?
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How much 'influence do customers' needs have on the company's products and services?
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How effectively does the company build individualized marketing programs?
•
How aware is the company of other organizations approaches to building relationships? After a thorough analysis and understanding the organization's internal dynamics,
we can come to the stage when the implementation of a CRM solution has to be carried out.
Integrated Customer Relationship Management:
The framework of the ICRM practice defines Competitive Customer Relationship based on customers’ needs under market competitions. The chart also demonstrates its integrated process of marketing strategy analysis: it starts from marketplace to understand the Competitive Customer Relationship structure and maps such relationship structure into a company’s database (the Zoom RAI BUSINESS SCHOOL
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In process). It then develops marketing strategies to enhance a company’s Competitive Customer Relationship based on the data analysis from the database (the Zoom Out process).
Fig: Integrated Customer Relationship Management ICRM is about integration: the integration of data, the integration of marketing functions and the integration of database and marketplace. Through the integrated process, ICRM overcomes the serious limitations in the current CRM practice.
1) Identify Competitive Customer Relationship • •
what is competitive customer relationship What drives competitive customer relationship 2) Measure Competitive Customer Relationship •
how to measure Competitive Customer Relationship
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3) Improve Competitive Customer Relationship •
-with which customers to build Relationship
•
-how to Improve Competitive Customer Relationship
how to develop effective customer relationship management strategies
ICRM is the first theoretical framework for effective customer relationship management. It provides practical answers to the six critical questions about customer relationship management. It also provides a standard marketing process for companies to manage their customer relationship effectively. ICRM is designed to manage Competitive Customer Relationship. Below is a table comparison about how ICRM handles the six critical questions about customer relationship management differently from the current CRM practice.
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•
Comparisons between ICRM and CRM
PROPOSED MODEL FOR CRM
The Model has 4 steps which may be followed by the company to introduce CRM. These steps are to be implemented in strict order.
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Step 1 : Identifying Your Customers
The activities involved are : •
Collect and enter more customer names into the existing database.
•
Collect additional information about your customers. Verify and update customer data and delete outdated
Step 2 :
Differentiating your Customers
Activity involved are : •
Identify your organisation's top customers.
•
Determine which customers cost your organisation money.
•
Find higher value customers who have complained about your product or service more than once in the last year.
•
Look for last year's large customers who have ordered half as much or less this year.
•
Find customers who buy only one or two products from your company but a lot from other business.
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•
Rank customers into A, B and C categories, roughly based on their value to the company.
Step 3 : Interacting with Your Customer Activities involved are : •
Call your own company and ask questions; see how hard it is to get through and get answers.
•
Call your competitions to compare their customer service with yours.
•
Initiate more dialogue with valuable customers
•
Improve complaint handling
•
Use technology to make doing business with the company easier.
Step 4 : Customizing Your Enterprise's Behaviour Activities involved are : •
Customized paperwork to save your customers time and your company money.
•
Personalize your direct mail
•
Fill out forms for your customers
•
Ask customers how, and how often, they want to hear from you.
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Find out what your customers want
•
Ask your top ten customers what you can do differently to improve your product or service
•
Involve top management in customer relations.
If all these activities are carried out with perfection, it may be assumed that the company shall have an effective and robust CRM program. •
CONCLUSIONS:
The domain of CRM extends into many areas of marketing and strategic decisions. Its recent prominence is facilitated by the convergence of several other paradigms of marketing and by corporate initiatives that are developed around the theme of cooperation and collaboration of organization units and its stockholders, including customers. CRM refers to a conceptually broad phenomenon of business activity; if the phenomenon of cooperation and collaboration with customers become the dominant paradigm of marketing practice and research, CRM has the potential to emerge
as
the
predominant
perspective
of
marketing.
From
a
corporate
implementation point of view, CRM should not be misunderstood to simply mean a software solutions implementation project. Building customer relationship is a fundamental business of every enterprise and it requires a holistic strategy and process to make it successful. RAI BUSINESS SCHOOL
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RECOMMENDATIONS:
Based on the thorough analysis of the findings in the conclusion section, we are in a position to propose the recommendations. The recommendations are in a form of a list of activities and a series of exercise designed for executives, managers, and employees at all levels in the company, as well as for the customers and channel partners. Reviewing the list and working through the exercises will help the company to determine what type of program it can implement immediately, what it needs to do to position it for a large-scale initiative, and how it should prioritise the plans and activities.
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