Customer Relationship Management (CRM ). CRM ?. “Strategy” “An approach to building and sustaining long-term business with customers.” It is about creating a feel of high touch in high tech environment. CRM.
long-term business with customers.”
People & Process
CRM applications & technologies are just a tool to support CRM strategy
CRM strategy drives structure & technology
Reduces costs, provides efficient operation
Increases customer satisfaction & Loyalty
Automate inefficient and expensive work processes
Increased marketing and selling opportunities
It costs six times more to sell to a new customer than to sell to an existing one.
A typical dissatisfied customer will tell eight to ten people about his or her experience.
The odds of selling a product to a new customer are 15 percent, whereas the odds of selling a product to an existing customer are 50 percent.
90% companies don’t have sales and service integration
70% of complaining customers will do business again if their complaint quickly addressed.
Identify prospects and customers
Differentiate customers by needs
and value to company
Interact to improve knowledge
Customize for each customer
Techniques used to gain new customers
Techniques to maintain relationships with existing customers
Techniques to encourage customers to increase their involvement with an organization
ExtendManaging the Customer Life Cycle: The Three Phases of CRM
Components of Customer Pyramid
Rest of the World
The Platinum Tier
Most profitable customers,
Heavy users of the product, not overly price sensitive, willing to invest in and try new offerings, and are committed to the firm.
The Gold Tier
Profitability levels are not as high, perhaps because the customers want price discounts that limit margins.
They might not be as loyal to the firm even though they are heavy users in the product category – they might minimize risk by working with multiple vendors rather than just the focal company.
The Iron Tier
Provide the volume needed to utilize the firm’s capacity
Spending levels, loyalty, and profitability are not substantial enough for special treatment.
The Lead Tier
Costing the company money.
They demand more attention than they are due given their spending and profitability, and
they are sometimes problem customers – complaining about the firm to others and tying up the firm’s resources.
Differentiating Business Customers in the Retail Real Estate Industry
Differentiating Business Customers in the Marketing Research Industry
When service resources, including employee time, are limited.
When customers want different services or service levels.
When customers are willing to pay for different levels of service.
When customers define value in different ways.
When customers can be separated from each other.
When service differentials can lead to upgrading customers to another level.
When they can be accessed either as a group or individually.
Customer alchemy is the art of turning less profitable customers into more profitable customers.
It can take place at any tier along the Customer Pyramid, but is more difficult at some levels than at others.
e.g: it is very difficult to move Lead customers up to Gold or Platinum tiers, and it is often necessary to “get the Lead out” rather than try to move those customers up.
If the decision is made to keep Lead customers, the strategies used are typically different than those used at other tiers.
Managing Expectations can help to move the customers up the ladder
Growing “share of customer”
e.g : yatra.com, mytrip.com etc