1) Describe the features & concept of CRM ? Why is it necessary ?

The mutual relationship between the customer and buyer? Ans:- CRM Customer Relationship Management is a system for coordinating the business strategies, organisational structure and culture of companies with customer information and IT in order to satisfy customer needs at every contact and thus achieve business advantages and profit. A business strategy in which the customer is the focus of attention can provide an answer to the interesting question that many companies cant really answer: How many customers do we actually have and which of them are truly profitable? Companies know how many contracts they have concluded or how many business transactions take place in a day, and what their market share is in comparison with their competitors, but they dont know how many individual customers they actually have, how many products particular customers buy or how easy or difficult it is for the customers to obtain answers to their inquiries or how they communicate with the company in general. The fact is that the majority of companies dont know when and why they lose their customers. Customer Relationship Management is a strategy which is customized by an organization to manage and administrate its customers and vendors in an efficient manner for achieving excellence in business. It is primarily entangled with following features:1. Customers Needs- An organization can never assume what actually a customer needs. Hence it is extremely important to interview a customer about all the likes and dislikes so that the actual needs can be ascertained and prioritized. Without modulating the actual needs it is arduous to serve the customer effectively and maintain a long-term deal. 2. Customers Response- Customer response is the reaction by the organization to the queries and activities of the customer. Dealing with these queries intelligently is very important as small misunderstandings could convey unalike perceptions. Success totally depends on the understanding and interpreting these queries and then working out to provide the best solution. During this situation if the supplier wins to satisfy the customer by properly answering to his queries, he succeeds in explicating a professional and emotional relationship with him. 3. Customer Satisfaction- Customer satisfaction is the measure of how the needs and responses are collaborated and delivered to excel customer expectation. In todays competitive business marketplace, customer satisfaction is an important performance exponent and basic differentiator of business strategies. Hence, the more is customer satisfaction; more is the business and the bonding with customer. 4. Customer Loyalty- Customer loyalty is the tendency of the customer to remain in business with a particular supplier and buy the products regularly. This is usually seen when a customer is very much satisfied by the supplier and re-visits the organization for business deals, or when he is tended towards re-buying a particular product or brand over times by that supplier. To continue the customer loyalty the most important aspect an organization should focus on is customer

satisfaction. Hence, customer loyalty is an influencing aspect of CRM and is always crucial for business success. 5. Customer Retention- Customer retention is a strategic process to keep or retain the existing customers and not letting them to diverge or defect to other suppliers or organization for business. Usually a loyal customer is tended towards sticking to a particular brand or product as far as his basic needs continue to be properly fulfilled. He does not opt for taking a risk in going for a new product. More is the possibility to retain customers the more is the probability of net growth of business. 6. Customer Complaints- Always there exists a challenge for suppliers to deal with complaints raised by customers. Normally raising a complaint indicates the act of dissatisfaction of the customer. There can be several reasons for a customer to launch a complaint. A genuine reason can also exist due to which the customer is dissatisfied but sometimes complaints are launched due to some sort of misunderstanding in analyzing and interpreting the conditions of the deal provided by the supplier regarding any product or service. Handling these complaints to ultimate satisfaction of the customer is substantial for any organization and hence it is essential for them to have predefined set of process in CRM to deal with these complaints and efficiently resolve it in no time. 7. Customer Service- In an organization Customer Service is the process of delivering information and services regarding all the products and brands. Customer satisfaction depends on quality of service provided to him by the supplier. The organization has not only to elaborate and clarify the details of the services to be provided to the customer but also to abide with the conditions as well. If the quality and trend of service go beyond customers expectation, the organization is supposed to have a good business with customers. Looking at some broader perspectives given as below we can easily determine why a CRM System is always important or necessary for an organization. A. A CRM system consists of a historical view and analysis of all the acquired or to be acquired customers. This helps in reduced searching and correlating customers and to foresee customer needs effectively and increase business. B. CRM contains each and every bit of details of a customer, hence it is very easy for track a customer accordingly and can be used to determine which customer can be profitable and which not. C. In CRM system, customers are grouped according to different aspects according to the type of business they do or according to physical location and are allocated to different customer managers often called as account managers. This helps in focusing and concentrating on each and every customer separately. D. A CRM system is not only used to deal with the existing customers but is also useful in acquiring new customers. The process first starts with identifying a customer and

E.

F. G.

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maintaining all the corresponding details into the CRM system which is also called an Opportunity of Business. The Sales and Field representatives then try getting business out of these customers by sophistically following up with them and converting them into a winning deal. All this is very easily and efficiently done by an integrated CRM system. The strongest aspect of Customer Relationship Management is that it is very costeffective. The advantage of decently implemented CRM system is that there is very less need of paper and manual work which requires lesser staff to manage and lesser resources to deal with. The technologies used in implementing a CRM system are also very cheap and smooth as compared to the traditional way of business. All the details in CRM system is kept centralized which is available anytime on fingertips. This reduces the process time and increases productivity. Efficiently dealing with all the customers and providing them what they actually need increases the customer satisfaction. This increases the chance of getting more business which ultimately enhances turnover and profit. If the customer is satisfied they will always be loyal to you and will remain in business forever resulting in increasing customer base and ultimately enhancing net growth of business.

In todays commercial world, practice of dealing with existing customers and thriving business by getting more customers into loop is predominant and is mere a dilemma. Installing a CRM system can definitely improve the situation and help in challenging the new ways of marketing and business in an efficient manner. Hence in the era of business every organization should be recommended to have a full-fledged CRM system to cope up with all the business needs. In CRM the alphabet R means relationship. But there is always an ambiguity to understand the actual meaning of this relationship. This relationship between supplier and customer is not a personal relationship or a one-time transaction relationship; for example buying a refrigerator from a consumers outlet would not be called as a relationship. Relationship between any two parties is actually the interaction or transaction done between the two over-times or consists of a continuous series of synergistic episode of interaction many a times. This relationship only exists when the two parties diverge from a state of autonomy to mutual or interdependent. Occasionally having a cup of tea from a caf does not mean that there is a relationship. If the customer returns to the caf and orders the same tea again because he likes the environment and taste or the method of making tea, more looks like a relationship. Relationship with customers can change from time to time because it is evolved under distinguished situations. Following are the stages from where the relationship with customers can evolveExploration- Exploration is the process when customer investigates or tests the suppliers capabilities and performance or cross verifies the products or brands usefulness. If the test results fail to satisfy customers demands, the relationship can drastically come to an end.

Awareness- Awareness is the process when the customer understands the motivational values of supplier or the products he sells. Expansion- Expansion is the process when the supplier wins customers faith and customer falls under huge interdependence of the supplier. This is time when there are more chances of business with that particular customer and expand business. Commitment- Commitment is a powerful stage when suppliers learn to adapting business rules and goal to excel. Dissolution- Dissolution is a stage when customer requirement suddenly changes and he looks for better perspectives. This sudden change is the end of relationship. Relationship can come to an end due to many reasons like - customer is not satisfied with the services of supplier or customer diverges to other better brands and products. Suppliers can also prefer to break relationships due to customer failing to be a part to increase sales volume or when the suppliers are entangled with fraud cases. Broadly there can be two distinguished attributes of a developed relationship between supplier and customer: Trust: Trust means confidence and security in any relationship and can be treated as the biggest investment in building long term relationships. Trust is developed between the two parties when they experience flawless and satisfied motives between each other. As a result of knowing more about each other, all the doubts and risks are minimized and leads to inevitably smooth business. Lack of trust on the other hand weakens the relationship foundation and chances of uncertainty and conflicts increases. Commitment: Commitment is yet another milestone that should be achieved to set a long term mutual relationship. Commitment can only be attained when there is mutual trust and the two parties share each others values. In a committed relationship both suppliers and customers strive to uphold the relationship and never want to exit which in turn results in building the relationship stronger and sharper. There is, in fact, huge cost which is incurred in switching from committed relationships of one supplier and build new relationships with other suppliers from scratch. Relationship is always mutual or reciprocal so it is important for both supplier and customers to stick to common guideline to attain better relationship among each other. There is lot of involvement of cost, efforts and time in striving developed relationships between the two parties but the outcome is always inevitable.

2) Discuss the merits & demerits of a) Strategic CRM b) Analytical CRM c) Collaborative CRM? Ans:- Setting up a successful CRM system in a company demands a vision covering the entire scope of operations starting at the highest organizational level. When we define the guidelines for future cooperation with customers, we need a strategy for achieving our goals. The CRM strategy takes into account the financial objectives and business strategy of the company and represents an upgrade of its marketing strategy. It determines how the company will create profitable relations with its customers and gain their loyalty. The strategic goals must be measurable by CRM metrics. The main focus of attention is not the product itself, but meeting your customers' needs and thus building their satisfaction and loyalty. This is the only way to ensure sustainable competitive advantages and longterm success in the market. However, the mere introduction of CRM technology does not make a company customer-oriented. The company also needs to change its frame of mind, culture, behavior and organizational structure. In introducing a comprehensive CRM system, SRC offers support from a qualified team of business administration experts, rich experience and its own proven methodology. CRM architecture

Operational CRM:- is the automation of horizontally integrated business processes that include direct access to customers, cross-sales, marketing and customer support through multi-layered communication channels. Analytical CRM:-enables thorough insight into customer needs and expectations, understanding their behaviour, forecasting behavioural patterns, segmentation, profitability analysis and other customerrelated and product-related analyses. Collaborative CRM:- supports collaboration and communication with customers, partners and suppliers with the possibility of personalisation. Advantages & Disadvantages of CRM:ADVANTAGES OF CRM 1. The advantages of carrying out a proper business CRM are many and varied: - First of all, it is a good way to expand the customer's portfolio. By contacting prospects, it is most likely that many of them are interested in the company activity, in its products and services. It is obvious that if the company does not initiate a process to go towards the

customer, then the customer will not come to the company, unless he experiments a specific and urgent need. 2. Naturally, CRM offers the advantage of gaining customer loyalty. As stated above, loyalty is less costly for a company and the loyal customer becomes a professional recommendation of the company and its services. Furthermore, the company can promote the work it has done for its customers in order to approach prospects. It is always more convincing to present a work carried out rather than to rely on our own theoretical expertise. 3. A good CRM associated with a good tool ensures companies to have a good view over the list of customers and prospects, to know where it stands with relationship management, when to contact them again, etc. Furthermore, an improved customer and prospect insight ensures a better and more targeted communication. CRM also ensures enhanced productivity. By fostering customer's loyalty, the company spends less time acquiring new customers and saves then time on other projects. DISADVANTAGES OF CRM However, despite the significant advantages of CRM, there are several disadvantages: 1. First, a mistaken tool choice may make CRM more complicated. This is why you need to consider in advance what kind of tools would be appropriate to your structure in order to follow its relationship with its customers and prospects. 2. CRM is not easy to put in place, attention must be given to the choice of tools, but also to the effective implementation of CRM process that will be undertaken by the company.

3) Describe the challenges & opportunities in a) Customer Acquisition b) Customer Retention?

Ans:- a) Customer acquisition:- Customer acquisition management is the set of methodologies and
systems to manage customer prospects and inquiries generated by a variety of marketing techniques. It can be considered the connectivity between advertising and customer relationship management. This critical connectivity facilitates the acquisition of targeted customers in an effective fashion. Customer acquisition management has many similarities to lead management. Sometimes missing from lead management definitions, but always included in customer acquisition management, is a closed-loop reporting system. Such a reporting system typically allows the organization to quantify the effectiveness of results of various promotional activities. This allows organizations to realize continuous improvements in both promotional activities and customer acquisition systems. Customer acquisition management also often includes the original response to a prospect immediately after their inquiry. This response could come in many forms a personalized fulfillment letter and brochure, an e-mail response or a telephone call. In each case the initial response is targeted to further the interest of the prospect and simplify the initial sales call for the sales channel. Like lead management, customer acquisition management creates an orderly architecture for managing large volumes of customer inquiries, or leads. The architecture must be able to organize numerous leads, at various stages of a sales process, across a distributed sales force. In order to understand this process, it is helpful to examine a simplified linear lead flow process, such as the following: Advertising and CRM Customer inquiry or response Inquiry captured Inquiry filtered Lead graded and prioritized Lead distribution Sales contact Lead nurturing or retention Sales result Analysis of promotion's effectiveness

The lead flow process can become enormously complex as customers and sales professionals begin to interact. These various interactions and subsequent actions can create a variety of scenarios, both productive and counterproductive. This exponential number of scenarios can provide for numerous opportunities to mishandle leads in such a way as to reduce their value. Managing these scenarios is the function of lead management. Challenges & Opportunities in a) Customer Acquisition Actually Customer acquisition is process so if your customer handling techniques change then you must optimize and upgrade the traditional ways of customer acquisition management process. Even if you are

exploring new methods to entertain more and more customers then you must encounter below challenges: 1. 2. 3. 4. 5. 6. 7. 8. Find psychology of customers, like how the customers feel and think about product. Then Reduce customer decision making cycle times towards confirmation. Analysis of customer behaviour and tendency while buying specific range of product. Studycustomers knowledge for influencing decision making power. Offering right platform or services by leveraging customer data. Enhanced customer experiences, which help you to stay ahead in competition. Increasing transparency and demonstrating returns on marketing investments. Manage global and local marketing campaigns efficiently.

b) Customer retention:- Customer retention is the activity that a selling organization undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship. A companys ability to attract and retain new customers, is not only related to its product or services, but strongly related to the way it services its existing customers and the reputation it creates within and across the marketplace. Customer retention is more than giving the customer what they expect, its about exceeding their expectations so that they become loyal advocates for yourbrand. Creating customer loyalty puts customer value rather than maximizing profits and shareholder value at the center of business strategy.[1] The key differentiator in a competitive environment is more often than not the delivery of a consistently high standard of customer service. Customer retention has a direct impact on profitability. Research by John Fleming and Jim Asplund indicates that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers returns a revenue gain of 3.4 times the norm.

4) Discuss the significance of database in CRM Practice? Ans:- Let's imagine your CRM program as the human body. Picture the sales database management system as its beating heart. It works non stop at the very core of your CRM, pumping the life blood -information -- to and from all parts of the system, connecting management, sales, marketing, the call center, and customer service. It is a computer based software application (program) that allows input of information in a related and structured way for processing and reporting. There are many technologies and terminologies used when investigating the world of databases and often experts will interchange the terminology and disagree on the best solutions. A typical example of a database solution could combine an accounts program like Sage or the contacts you may have in Microsoft Outlook. You may have a database as a list of information in a spreadsheet or use a simple database like Microsoft Access or Base in the Open Office suite. A contact database management system centralizes, organizes, and then shares the data needed to get the job done. Significance of database in CRM Practices Increase efficiency in data processing Improve communications with staff, volunteers, funders etc Increase membership satisfaction Improve management decision making Reduce wastage of / maximise resources Centralised data storage solution Secure data storage with multi-level security access Reduces duplication / conflicting information Event tracking Donations and gift aid tracking Integration with current information systems Automated processes and work flow patterns Effective communication (email / eNewsletters etc) The facility to track / measure communication / interactions / interventions with stakeholders Greater co-ordination between staff Increase support for volunteers To have a referral and signposting facility

Ability to create standard / ad-hoc and dynamic reports Can be internal or Internet based Scalable (can be extended to meet future needs) Measure effectiveness of outcomes and social impact of activities

5) Examine the constitute of customer portfolio Management?

Ans:- Effective portfolio management at all levels of an organization is a fundamental enabler of

strategic and financial success. A CEO managing a corporate portfolio of business units, a division president juggling a portfolio of brands, and a brand manager overseeing a portfolio of products and R&D projects beneath a brand umbrella all must engage regularly in some version of portfolio management. Foremost among portfolio management priorities are decisions about which businesses, brands, products, and development projects to invest in vs. which ones to discontinue. In some cases, the decision-making process is explicitly defined and employs conventional techniques; in others, it occurs implicitly within the strategic planning cycle or in a reactive, ad hoc fashion as market conditions evolve. Yet companies often leave a critical perspective out of the portfolio management process: that of the customer. This omission can lead to highly inaccurate assessments of how balanced (and therefore risky) a portfolio is, and of the potential of individual brands, businesses, and the portfolio as a whole. In addition, companies often overlook many customer-driven opportunities to strengthen their portfolios for example, by identifying new growth vectors for a brand within existing or new customer segments. Conventional portfolio planning techniques are likely to be of little help here, as they typically reflect the customers perspective only indirectly via high-level metrics such as market growth rate. Nor are conventional techniques helpful that lump the customers perspective with a laundry list of other factors that define industry attractiveness. Although there are many important external and internal inputs to portfolio planning, we believe what is missing is a specific lens through which to examine the portfolio that reflects a deep and detailed understanding of the customer. In this article, we present a powerful way to incorporate the customer perspective into all the critical portfolio decisions: what to maintain, what to modify, what to streamline, and what to create. Our approach is based on the jobs-to-be-done methodology for capturing customer needs, described by Professor Clayton Christensen of the Harvard Business School and co-author Michael Raynor in the book The Innovators Solution. By integrating a broad understanding of the customers jobs-to-be-done into portfolio management, companies can find new ways to grow existing offerings in the portfolio, more accurately assess their true growth potential, find completely new opportunities to add, and more confidently assess the overall strength of the total portfolio. Portfolio management defined To frame our discussion, well define a portfolio as a set of items with common characteristics that qualify these items as candidates for inclusion. For example, a corporate portfolio is a set of business units under the same corporate umbrella, such as Procter & Gambles collection of business units, which includes Fabric Care, Home Care, Baby Care, Family Care, Beauty Care, Health Care and many others.

These business units may in turn contain portfolios of brands. For example, P&Gs Fabric Care business unit includes brands such as Tide, Gain, Downy, and Ariel. Each of these brands can encompass its own brand portfolio, for example the set of products underneath the Tide umbrella, which includes Tide Liquid, Tide with Bleach, Tide Coldwater, and Tide to Go. Our discussion below is relevant to all these types of portfolios. Any portfolio is created to achieve a more robust and successful business, typically defined by a set of financial and growth strategic objectives. A well-designed portfolio has three key characteristics: It is sufficient to achieve the objectives It is balanced across different types of opportunities and risk profiles It is optimized, i.e. contains the best possible set of elements, within each specific portfolio Portfolio management, then, is the process of regularly reviewing and updating a portfolio such that it is sufficient, balanced, and optimized relative to financial and growth strategic objectives. Regardless of the timeline by which portfolio management unfolds, it requires answering four key questions: 1. What elements of the portfolio should we maintain? 2. What elements should we modify, to increase their potential? 3. What should be streamlined out of the portfolio, either through divestment or shutting down, because of insufficient potential? 4. What could be created to increase the value of the portfolio? As well see, each of these questions can be answered much more effectively by assessing them through the lens of the customers jobs-to-be-done. Managing the portfolio from the customers perspective The jobs-to-be-done approach to understanding customers seeks to identify and characterize the fundamental problems (the jobs) customers try to solve in their lives, for which they seek to hire solutions. This reflects the fact that customers dont typically care about purchasing a product as an end in itself. Rather, problems arise in their lives that they need to solve, and when this happens they look for the solution or offering that is best available or best suited to get the job done. A group of customers with a commonly held set of important jobs-to-be-done defines a jobsbased segment. Understanding such segments in detail is the key to applying a customercentric lens to portfolio management. Well examine how this works for each of the critical portfolio management decisions.

Short Notes:1) Strategic goal of CRM :- CRM (Customer Relationship Management) is the successful blend of a business strategy and technology that enables a company to achieve their goals. The technology provides companies with ways to keep contact with existing customers, manage leads more effectively, measure results more often and standardize business processes. However, software

can not do this on its own. The software is actually only there to help enabling the CRM-strategy that a company designed before the implementation of their CRM-software. CRM-strategies vary according to the company they are designed for, however, successful strategies have several things in common. Here are five essential things one should always consider in setting up their strategy. 1. Design a strategy before implementing your CRM-software. This might seem obvious since we are talking about essential things in setting up a strategy, but planning projects is often the one thing that companies tend to forget. It is essential to design the CRM-strategy before you go and implement the software. Your strategy should contain all the short, medium and long term goals you have as a company in regard to your CRM usage. The plan must be complete, clear and for everyone to understand. 2. A CRM-strategy has to be aligned to the mission and purpose of the organization. It should communicate a consistent message about the company. But having a strong strategy that directly reflects your companys mission and purpose is not the only important aspect in creating a CRM-strategy. When having different departments, it is essential to also align all departmental strategies with the CRM-strategy. Each department has its own requirements and goals that you have to take in to account when developing your CRM-strategy. 3. CRM-strategies must acquire support by their senior executives to succeed. Not having executive sponsorship correlates to CRM failure. But gaining support from other stakeholders is mutually important! Since the sales management team will be the ones holding their salespeople and others accountable for using the CRM software in alignment with the organizations mission and purpose, it is especially important to get them on board. Without the full support of the sales management team, a successful CRM implementation can be very difficult. Companies may experience serious objections from salespeople as well as their salesmanagers if the CRM-strategy was not discussed with them before. 4. The key people from your organization, who will be using the CRM-system, should not only support but also fully understand how CRM works. Giving end-users the time to get to know the new system will make the implementation much easier. The sooner training begins, the sooner end-users will realize they are a part of the process and the quicker they will see the benefits to the application for them. Making them understand how the software works, how it will improve the companys competitive position and how they will benefit from it personally, will not only give you their support but will also increase their commitment to the software. 5. Choose your CRM-software wisely. Take the time to understand your business, decide what you truly need from the system and set up cost parameters in which the software can be implemented. Find a system that fits your business most, then, personalize the program to your needs with the help of the manufacturer.

2) Life time value estimation:- The purpose of the customer lifetime value metric is to assess the financial value of each customer. As Don Peppers and Martha Rogers are fond of saying, some customers are more equal than others. Customer lifetime value (CLV) differs from customer profitability or CP (the difference between the revenues and the costs associated

with the customer relationship during a specified period) in that CP measures the past and CLV looks forward. As such, CLV can be more useful in shaping managers decisions but is much more difficult to quantify. While quantifying CP is a matter of carefully reporting and summarizing the results of past activity, quantifying CLV involves forecasting future activity Customer lifetime value (CLV): The present value of the future cash flows attributed to the customer during his/her entire relationship with the company. Present value is the discounted sum of future cash flows: each future cash flow is multiplied by a carefully selected number less than one, before being added together. The multiplication factor accounts for the way the value of money is discounted over time. The time-based value of money captures the intuition that everyone would prefer to get paid sooner rather than later but would prefer to pay later rather than sooner. The multiplication factors depend on the discount rate chosen (10% per year as an example) and the length of time before each cash flow occurs. For example, money received ten years from now must be discounted more than dollars received five years in the future. CLV applies the concept of present value to cash flows attributed to the customer relationship. Because the present value of any stream of future cash flows is designed to measure the single lump sum value today of the future stream of cash flows, CLV will represent the single lump sum value today of the customer relationship. Even more simply, CLV is the dollar value of the customer relationship to the firm. It is an upper limit on what the firm would be willing to pay to acquire the customer relationship as well as an upper limit on the amount the firm would be willing to pay to avoid losing the customer relationship. If we view a customer relationship as an asset of the firm, CLV would present the dollar value of that asset. One of the major uses of CLV is customer segmentation, which starts with the understanding that not all customers are equally important. CLV-based segmentation model allows the company to predict the most profitable group of customers, understand those customers' common characteristics, and focus more on them rather than on less profitable customers. CLVbased segmentation can be combined with a Share of Wallet (SOW) model to identify "high CLV but low SOW" customers with the assumption that the company's profit could be maximized by investing marketing resources in those customers. Customer Lifetime Value metrics are used mainly in relationship-focused businesses, especially those with customer contracts. Examples include banking and insurance services, telecommunications and most of the business-to-business sector. However, the CLV principles may be extended to transactions-focused categories such as consumer packaged goods by incorporating stochastic purchase models of individual or aggregate behavior.

2) Scope of CRM:-