WHAT IS CRM ?

WHAT IS CRM ?
NEVER BEFORE, IN THE HISTORY OF BUSINESS, HAS IT BEEN SO DIFFICULT TO FIND TRUE SUSTAINABLE DIFFERENTATORS. THERE ARE FEW MARKETS AND INDUSTRIES THAT ARE NOT NOW SUFFERING FROM THE ONSET OF COMODIZATION. THE OUTCOME : A DRAMATIC AND PAINFUL EFFECT ON PROFIT MARGINS. THOSE ORGANISATIONS THAT ARE SUCCEEDING ARE THOSE THAT HAVE BEEN QUIETLY OBSESSED WITH BUILDING A GREAT CUSTOMER EXPERIENCE.

WHAT IS CRM?
THOSE WHO RECOGNIZED THE IMPORTANCE OF PROVIDING AN EMOTIONALLY ENGAGING, CAPTIVATING CUSTOMER EXPERIENCE THAT CREATES GENUINE CUSTOMER LOYALTY
THE EMOTIONAL DESIRE OF CUSTOMERS TO COME BACK AND CONSUME THAT EXPERIENCE AGAIN AND AGAIN. THESE FEW COMPANIES ARE ENGAGED IN ROMANCING THE CUSTOMER .

WHAT IS MEANT BY A CUSTOMER EXPERIENCE?

A CUSTOMER EXPERIENCE INTERACTION BETWEEN

AN ORGANIZATIONS PERFORMANCE, THE SENSES STIMULATED , AND EMOTIONS EVOKED,

IS

AN

PHYSICAL

EACH INTUITIVELY MEASURED AGAINST CUSTOMER EXPECTATIONS

ACROSS ALL MOMENTS OF CONTACT.

BENEFITS OF CRM
THESE ORGANIZATIONS, WHO HAVE, AND ARE NOW, FOCUSSED ON USING CUSTOMER SENSES AS AN INTEGRAL PART OF THEIR CUSTOMER EXPERIENCE ARE LAYING THE FOUNDATIONS OF TRUE, LONG TERM, SUSTAINABLE DIFFERENTIATION AND COMPETITIVE ADVANTAGE. KEY LEARNING PLOT WHERE YOU ARE IN TERMS OF THE DEVELOPMENT OF YOUR CUSTOMER EXPERIENCE AND THE DEGREE TO WHICH YOU ARE ORIENTED AROUND DELIVERING A NATURAL CUSTOMER EXPERIENCE.

WHAT IS MEANT BY A NATURAL CUSTOMER EXPERIENCE?

AN EXPERIENCE THAT IS UNDERPINNED BY STIMULATING CUSTOMER SENSES THROUGHOUT THE EXPERIENCE, AND ONE THAT LEAVES CUSTOMERS AND CLIENT WITH POSITIVE, EMOTIONALY CAPTIVATING EXPERIENCE

BEWARE THOSE ORGANIZATIONS IN THE TARGET MARKETING OR TRANSACTIONAL MARKETING MODE WHO HAVE FAILED TO RECOGNIZE, OR FAILED TO ACT UPON THEIR RECOGNITION, THAT THE DELIBERATE AND SYSTEMATIC EVOKING OF EMOTIONS IN CUSTOMERS IS THE BASIS OF BUILDING LONG TERM LOYALITY.

THE CUSTOMER EXPERIENCE

IT IS ONLY THOSE ENLIGHTENED AND NATURAL COMPANIES WHO HAVE RECOGNIZED THE POWER OF UNLEASHING EMOTIONS AND USING SENSORY STIMULI AS PART OF THE CUSTOMER EXPERIENCE. AND HAVE THEN ACTED TO EMBED THIS WITHIN THEIR ORGANIZATION.

WHO WILL ULTIMATELY CREATE THE ABILITY TO DELIVER A SENSORY EXPERIENCE THAT IS EMOTIONALLY ENGAGING THAT CAN BE LONGTERM WINNERS.

THE FOUR STAGE JOURNEY

TWO YEARS AGO, 71 % OF SENIOR BUSINESS LEADERS BELIEVED THE CUSTOMER EXPERIENCE WAS THE NEXT COMPETITIVE BATTLE GROUND. TODAY THAT FIGURE HAS RISEN BY A WHOPPING 24 % TO 95 %

ORGANIZATIONS ARE ON A DISTINCT FOUR-STAGE JOURNEY TO BECOME MORE CUSTOMER-FOCUSED.

THIS IS CALLED THE JOURNEY FROM NAIVE TO NATURAL THE FOUR STAGES ARE NAIVE - TRANSACTIONAL - ENLIGHTENED - NATURAL

THE CHANGING SCENARIO

84 % OF ORGANIZATIONS MARKET IS COMMODITIZING. BELIEVE THEIR

THE TIME FROM INNOVATION TO IMITATION IS NOW A MATTER OF WEEKS

MANY BUSINESSES ARE STRUGGLING WITH THE EFFECTS OF COMMODITIZATION, REDUCING PRICES AND REDUCING PROFIT, ALL OF WHICH IS LEADING TO COST CUTTING.
76 % OF ORGANIZATIONS BELIEVE COMMODITIZATION IS NOW AFFECTING THEIR PROFITABILITY.

MICHAEL PORTER said,

WHEN EVERYTHING IS EQUAL, PEOPLE BUY ON PRICE . THIS MEANS, THAT UNLESS YOU CAN INCREASE VOLUMES DRAMATICALLY, YOUR PROFITABILITY WILL ERODE IF YOU DO NOT WANT THIS TO HAPPEN, LET US INVERT MICHAEL PORTER STATEMENT :WHEN EVERYTHING IS UNEQUAL, PEOPLE DO NOT BUY ON PRICE. 47 % OF ORGANIZATIONS STILL CATEGORIZE THEMSELVES AS PRODUCT - LED.

QUOTABLE QUOTES
KATHRYN M. HALEY, V P CLIENT EXPERIENCE, RBC ROYAL BANK OF CANADA SAYS, I HEAR A LOT OF PEOPLE SAYING THAT IT IS DIFFICULT TO TRANSFORM THE EXPERIENCE IN FINANCIAL SERVICES, BUT I PERSONALLY THINK THE WORK THAT IS UNDERWAY TO IMPROVE OUR CLIENT EXPERIENCE WILL RADICALLY CHANGE THE WAY WE GO TO MARKET.
TEN YEARS FROM NOW, I THINK IT MAY ULTIMATELY CHANGE MARKETING TEXT BOOKS.

QUOTABLE QUOTES
PETER SCOTT, CUSTOMER SERVICE DIRECTOR, TMOBILE SAID.

THE WHOLE MARKET IS CHANGING AS PEOPLE BECOME MORE AFFLUENT AND MORE DEMANDING IN THE PRODUCTS AND SERVICES THEY ARE BUYING AS A SERVICE ORGANIZATION, WE NEED TO STEP BEYOND JUST BEYOND JUST PROVIDING A TRANSACTION TO MEET PEOPLES REQUIREMENTS.
IT IS NOW ABOUT STAGING EXPERIENCES, TAKING THEN THROUGH AN EXPERIENCE THAT ENGAGES THEIR EMOTIONS, -AND BY ENGAGING THEM, WE CAN BUILD RELATIONSHIPS, WHICH IN TURN, DEVELOPS LOYALTY.

QUOTABLE QUOTES
ROBERT STEPHENS, TOOK A BORING, COMMODITIZED BUSINESS, COMPUTER REPAIRS AND TURNED IT INTO A SPECIAL CUSTOMER EXPERIENCE CALLED THE GEEK SQUAD. HE SAYS,YOU HAVE TO LISTEN TO THOSE TWO VOICES IN YOUR HEAD. YOU KNOW WHEN YOU ARE ON THE VERGE OR COMPROMISE AND MEDIOCRITY. THERE IS ALWAYS THE OTHER PATH OF BEING DIFFERENT.

WHAT IS A
GREAT CUSTOMER EXPERIENCE?
WHAT IS YOUR ORIENTATION WITH RESPECT TO YOUR CUSTOMER? HOW CUSTOMER ORIENTED IS YOUR ORGANIZATION ? HOW WELL PLACED ARE YOU TO DELIVER A GREAT CUSTOMER EXPERIENCE ?

GREAT CUSTOMER EXPERIENCES ARE

1. A SOURCE ADVANTAGE OF LONG-TERM COMPETITIVE

WHAT IS A
GREAT CUSTOMER EXPERIENCE?contd.

2. CREATED BY CONSISTENTLY EXCEEDING CUSTOMERS PHYSICAL AND EMOTIONAL EXPECTATIONS. 3. DIFFERENTIATED BY FOCUSING ON STIMULATING PLANNED EMOTIONS.
4. ENABLED THROUGH, INSPIRATIONAL LEADERSHIP, AN EMPOWERING CULTURE AND EMPATHETIC PEOPLE WHO ARE HAPPY AND FULFILLED.

WHAT IS A
GREAT CUSTOMER EXPERIENCE?contd.

5. DESIGNED OUTSIDE IN RATHER THAN INSIDE OUT

6. REVENUE GENERATING AND SIGNIFICANTLY REDUCE COSTS.

CAN

7. AN EMBODIMENT OF THE BRAND.

NAIVE ORIENTATION DEFINED

AN ORGANIZATION THAT FOCUSES ON ITSELF TO THE DETRIMENT OF THE CUSTOMER.

IT IS INSIDE OUT EITHER THROUGH CHOICE OR BECAUSE IT DOES NOT KNOW WHAT IT IS DOING.

TRANSACTIONAL ORIENTATION

DEFINED
AN ORGANIZATION THAT FOCUSES PRIMARILY ON THE PHYSICAL ASPECTS OF THE CUSTOMER EXPERIENCE. HOWEVER, ITS FOCUS IS RUDIMENTARY, AS MANY ASPECTS OF THE CUSTOMER EXPERIENCE REMAIN LEFT TO CHANCE AND ARE UNCOORDINATED AND INSIDE OUT. THIS ORGANIZATION IS TYPICALLY REACTIVE TO CUSTOMER DEMANDS.

ENLIGHTENED ORIENTATION DEFINED

AN ORGANIZATION THAT HAS RECOGNIZED THE NEED FOR A HOLISTIC, COORDINATED, AND DELIBERATE APPROACH TO THE CUSTOMER EXPERIENCE. IT IS PROACTIVE IN NATURE TOWARDS THE CUSTOMER AND ORCHESTRATES EMOTIONALLY ENGAGING CUSTOMER EXPERIENCES. IT STIMULATES PLANNED EMOTIONS .

NATURAL ORIENTATION DEFINED

AN ORGANIZATION WHERE FOCUS ON THE CUSTOMER IS TOTAL. IT IS VERY PROACTIVE AND IS NATURALLY FOCUSED ON THE COMPLETE CUSTOMER EXPERIENCE. IN ORDER TO PRODUCE MEMORABLE AND CAPTIVATING CUSTOMER EXPEIENCES IT USES SPECIFIC SENSES TO EVOKE PLANNED EMOTIONS. THIS IS HOW ORGANIZATIONS ARE DISTRIBUTED ACROSS THESE FOUR ORIENTATION. NAIVE - 9 % - TRANSACTIONAL - 67 % ENLIGHTENED - 22 % - NATURAL - 2 %

The Nave to Natural Model

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

DEFINITIONS 1. CRM IS THE PROCESS OF MANAGING RELATIONSHIPS WITH EXISTING CUSTOMERS TO MAXIMIZE THEIR ROYALTY, INCREASE REVENUES FROM THEM, AND RETAIN THEM WHIL SELECTIVELY ATTRACTING NEW CUSTOMERS.

2. CRM IS A COMPREHENSIVE APPROACH FOR CREATING, MAINTAINING AND EXPANDING CUSTOMER RELATIONSHIPS. 3.CRM IS AN INTEGRATION FRAME WORK, A BUSINESS STRATEGY

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

4. CRM IS A PROCESS OF LEARNING TO UNDERSTAND THE VALUES THAT ARE IMPORTANT TO INDIVIDUAL CUSTOMERS AND USING THAT KNOWLEDGE TO DELIVER BENEFITS THE CUSTOMER REALLY WANTS AND MAKING IT EASIER FOR THE CUSTOMER TO DO BUSINESS WITH THE COMPANY.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM) Contd.

5. CRM IS A PACKAGE OF KNOW LEDGE AND TECHNIQUES AIMED PRECISELY AT ESTABLISHING CUSTOMER DELIGHT.
6. CRM IS ABOUT COLLABORATING WITH EACH CUSTOMER - BEING ABLE TO CREATE THE CLASSIC WIN-WIN SITUATION. YOU ADD VALUE TO EACH CUSTOMRS DAILY LIFE, AND THEY GIVE YOU LOYALTY IN RETURN.

WHAT MAKES A CUSTOMER LOYAL?

Customer loyalty is founded on the satisfaction with the total experience with your company. A loyal customer will want to purchase incremental offerings, products, and services often without exploring comparable competitor offerings. In ebusiness, the ward of mouse that often moves faster than word of mouth will be in your favor if you consistently meet these three needs : 1. Knowledge - of the customers past dealings with your company, of market and industry trends, of your own products, its features, and benefits 2. Anticipation of future needs

WHAT MAKES A CUSTOMER LOYAL?contd

3. Superior communication across experimental phases of each transition

all

To be able to retain customers, your business must meet these needs better than any competitor. If one employee conveys limited knowledge, poor anticipation of customer needs, and unsatisfactory communications, he or she stereo types the entire organization in that customers perception.

THE FOUR TENETS OF CRM

FOUR FUNDAMENTAL IDEAS EXPLAIN THE VALUE PROPOSITION OF CRM
1. USE EXISTING RELATIONSHIPS TO MAXIMIZE REVENUE. 2. USE CUSTOMER KNOWLEDGE TO CONSISTENTLY DELIVER EXCELLENT SERVICE.

3. DEVELOP REPEATABLE SALES PROCESSES

4. DELIVER VALUE LOYALTY. AND DEVELOP CUSTOMER

CRM TERMINOLOGY
SEGMENTATION : SUBDIVISION OF CUSTOMER POPULATIONS INTO FINER GROUPS DEFINED BY THEIR CHARACTERISTICS.

CUSTOMER PROFITABILITY : MEASUREMENT AND RANKING OFCUSTOMERS BASED ON THEIR LONG - TERM PROFITABILITY CALCULATED BY MEASURING ACCUMULATED CUSTOMER REVENUELESS OPERATIONAL COSTS AND ACQUISITION COSTS.

CRM TERMINOLOGY..contd
CUSTOMER RETENTION : MEASURING HOW LIKELY THE CUSTOMER IS NOT TO CHURN, AND ENGAGE IN REPEAT TRANSACTIONS WITH YOUR BUSINESS WITHOUTSWITCHING TO A CUSTOMER (CHURNING)
RESPONSE ANALYSIS: MEASUREMENT OF THE EFFECTIVENESS OF A CUSTOMIZED CAMPAIGN OR PROMOTION WITHIN A SPECIFIC CUSTOMER SEGEMENT.

THE CRM LIFECYCLE

CUSTOMERS, WHETHER CONSUMERS OR BUSINESS DO NOT MERELY WANT MORE CHOICES THEY WANT EXACTLY WHAT THEY WANT WHEN , WHERE AND HOW THEY WANT IT.
APPLYING A MASS-MARKETING OR MASSPRODUCTION MENTALLY ONLY TURNS CUSTOMERS OFF BY BOMBARDING THEM WITH TOO MANY CHOICES.

THE KEY TO FOCUS ON INDIVIDUALIZATION BASED ON SUSTAINABLE TWO-WAY LEARNING RELATIONSHIPS. TO BUILD SUCH RELATIONSHIPS, IT IS NECESSARY TO UNDERSTAND THE THREE PHASES OF CRM. ACQUISITION, ENHANCEMENT, AND RETENTION

DETERMINING THE VALUE OF CRM

THE NEED FOR PERSONALIZING INTERACTIONS AND DETERMINING THE VALUE OF CRM DEPENDS ON THE NATURE OF PRODUCTS AND SERVICES SOLD BY YOUR COMPANY, AND ON THE LEVEL OF DISPERSION AMONG VARIOUS CUSTOMERS NEEDS. A LEADING U.S. AIRLINE, FOR EXAMPLE, RECOGNIZES THAT 6 % OF ITS CUSTOMERS REPRESENT 24% OF ALL MILES FLOWN, AND 37 % OF ITS REVENUES.

THIS AIRLINES INITIAL CUSTOMER RELATIONSHIP BUILDING EFFORTS MUST THEREFORE FOCUS ON THIS SMALL-SEGMENT OF MOST-VALUABLE CUSTOMERS

Three Key Phases of CRM

CRM Phase
Acquisition

Key Activities
Differentiate product/service according to customer needs Offer unmatched convenience through customer knowledge Back with excellent service and support and proactive response Cross-sell and up-sell products Increase sales per customer Gain customer knowledge to build service adaptability Deliver new products that meet current customers needs Employee incentives to retain customers

Enhancement Retention

Three Key Phases of CRM

ACQUIRING NEW CUSTOMERS THE VALUE PROPOSITION TO THE CUSTOMER IS THE OFFER OF A SUPERIOR PRODUCT BACKED BY EXCELLENT SERVICE. ENHANCING THE PROFITABILITY OF EXISTING CUSTOMERS

THE VALUE PROPOSITION TO THE CUSTOMER IS AN OFFER OF GREATER CONVENIENCE AT LOW COST (ONE STOP SHOPPING)

RETAINING PROFITABLE CUSTOMERS FOR LIFE

THE VALUE PROPOSITION TO THE CUSTOMER IS AN OFFER OF A PROACTIVE RELATIONSHIP THAT WORKS IN HIS BEST INTEREST.

RETAINING PROFITABLE CUSTOMERS FOR LIFE

IF YOU WANT TO MAKE MONEY. HOLD ONTO YOUR GOOD CUSTOMERS. THE SAME IS IN PERSONAL RELATIONSHIPS, THE LEVEL OFUNDERSTANDING AND INTIMACY GROWS OVER TIME, AS LONG AS BOTH PARTIES ARE COMMITTED TO MAKING THE RELATIONSHIP WORK. THE SAME IS TRUE IN THE WORLD OF BUSINESS LEARN THIS QUICKLY, BECAUSE COMPETITION IS INCREASING SO FAST THAT CONSUMERS ARE RAPIDLY FINDING OUT THAT THEY HAVE A WIDE SELECTION OF DANCE PARTNERS FROM WHICH TO CHOOSE.

ORGANIZING AROUND THE CUSTOMER :

THE NEW CRM ARCHITECTURE

Take a moment to answer the following questions about your company. -ARE MOST OF THE COMPANYS APPLICATIONS DESIGNED SIMPLY TO AUTOMATE EXISTING DEPARTMENTAL PROCESSES ? -ARE THIS APPLICATIONS CAPABLE OF IDENTIFING AND TARGETING THE BEST CUSTOMERS, THOSE WHO ARE THE MOST PROFITABLE FOR THE ORGANIZATION ?

THE NEW CRM ARCHITECTURE

ARE THESE APPLICATIONS CAPABLE OF REAL-TIME CUSTOMIZATION/PERSONALIZATION OF PRODUCTS AND SERVICES BASED ON DETAILED KNOWLEDGE OF CUSTOMERS WANTS, NEEDS AND BUYING HABITS ? DO THESE APPLICATIONS KEEP TRACK OF WHEN THE CUSTOMER CONTACTS THE COMPANY, REGARDLESS OF THE CONTACT POINT ? ARE THESE APPLICATIONS CAPABLE OF A CONSISTENT USER EXPERIENCE ACROSS ALL THE CONTACT POINTS THE CUSTOMER CHOOSES ? IF THE ANSWERS TO THESE QUESTIONS ARE NO, THEN YOU SHOULD SERIOUSLY CONSIDER A NEW CRM ARCHITECTURE IN THE NEAR FUTURE.

THE NEW CRM ARCHITECTURE

WHAT IS NEW IS THE CUSTOMER-CENTRED NATURE OF APPLICATIONS, WHICH MEANS ORGANIZING PROCESSES AROUND THE CUSTOMER, RATHER THAN MARKETING, SALES OR ANY OTHER, INTERNAL FUNCTION. -- MEASUREMENTS AND FEEDBACK FROM THE CUSTOMER DRIVE IMPROVEMENT IN THE CRM PROCESS.

THE CUSTOMERS VIEWPOINT BECOMES AN INTEGRAL PART OF THE PROCESS, ALLOWING IT TO CHANGE WITH THE CUSTOMERS NEEDS.
-- IN OTHER WORDS, COMPANIES BASE THEIR ACTIONS, NOT ON THE PRIORITIES OF FUNCTIONAL FIEFDOMS, BUT ON THE OVERALL CORPORATE OBJECTIVE OF PROVIDING CUSTOMER SATISFACTION.

CRM PROCESS COMPETENCIES

IDENTIFYING THESE PROCESS COMPETENCIES IS IMPORTANT BECAUSE YOU MUST UNDERSTAND THAT A COMPANY CANNOT MANAGE AND DEVELOP ITS CRM INFRASTRUCTURE IF ITS MANAGERS DO NOT SHARE THE SAME VIEW OF WHAT THE CORE CRM COMPETENCIES ARE

REALIZE THAT THESE COMPETENCIES FORM THE SOUL OF CRM

AND ARE DISTINCTLY DIFFERENT FROM THE UNDER LYING TECHNICAL INFRASTRUCTURE, AND BE ABLE TO IDENTIFY WHAT CORE COMPETENCIES ARE MISSING IN ORDER FOR YOUR COMPANY TO DEVELOP GOALS.