Customer Relationship Management (CRM) [MBA topic]

Customers are the reason why businesses exist. Without the customer, you’re out of business. Being mindful of that fact, just keeping it top of mind can go a long way toward achieving a customer-centric culture. More and more organizations are adopting customer relationship management (CRM) systems with good reason. CRM systems help companies better understanding their clients and their specific needs.

Introduction

Customer relationship management is an approach to understand the customer preferences by capturing and integrating data from all the functional areas within the organization, consolidating, analyzing and disseminating it to various other customer touch points. It is a set of practices, strategies combined with technology that organizations use in order to analyze customer interactions throughout the customer lifecycle in order to build better relationships and retain them.

A CRM helps manage a company’s interaction with current and potential customers. It uses customers history with a company to improve business relationships with customers. It helps to find new customers, win their business, and keep them happy by organizing customer information. Examples where CRM are used – Supplier Onboarding, customer service, and support.

More benefits include:

Popular CRM Products:

• Zoho CRM
• Infusionsoft
• Freshdesk
• Insightly
• Salesforce

How does it help?

A CRM application is a better way to manage and be organized. An effective CRM application provides an organized, comprehensive view of a company’s customers and prospects, and employees’ interactions with them. CRM tells you which customers are producing the most profit.

Besides improving customer service, CRM also offers other benefits to your business. TCRM brings more interactions between buyers and sellers so as to improve customer loyalty and sales. CRM establishes multiple connections between supplier and customers so that they relate as serious partners in business. In such situations, there should be more understanding (reciprocity) between buyers and sellers. The information stored in your CRM system can equip your organization to more effectively pursue new business, both with existing clients as well as with prospective clients.

With a lot to gain from a CRM deployment, more and more companies are now understanding and acknowledging the business sense to implement CRM within their firm.

• Enhanced ability to target profitable customers.
• Integrated assistance across channels
• Enhanced sales force efficiency and effectiveness
• Improved pricing
• Customized products and services
• Improved customer service efficiency and effectiveness
• Individualized marketing messages also called campaigns
• Connect customers and all channels on a single platform.

CRM in a Bank

With the help of CRM a bank can analyze the customer history, predict his preferences and there by improve relations with customer’s ultimately driving sales growth.

The information that has been gathered about the customers can be entered into an already existing ERP system and made available to all the departments to make informed choices. CRM softwares support business processes in sales, service, and marketing, integrating customer information from many different sources. It helps organization build long lasting relationships with their customers and prevent customer churn. The various touch points that the Private Bank can use to facilitate this interaction include telephone, e-mail, customer service desk, conventional mail, Facebook, Twitter, Web site, wireless device, or retail store (the bank itself). The bank can provide a 24*7 helpline, provide mobile apps and instructions on how to use the app, send emails/SMS regarding latest promotional activities etc.

With the help of a CRM system the Private bank will now be able to perform the following tasks: The issues faced by the Private sector bank as stated in the case can be resolved with the introduction of a CRM system as these systems will provide a 360 view of the customer. Once data about the customers is obtained the organization can plan to use it constructively depending upon what the customers like.

CRM systems support direct marketing by capturing customer data and providing product and services information. The bank can use this information for qualifying leads for targeted marketing, scheduling and tracking emails. These systems give an insight into profitable and unprofitable customers giving an insight into the resources that need to be expended on them. Based on the current portfolio of customers the bank knows which customers they can upsell and cross-sell products. Up-selling will help the Bank to expand its customer base by providing products of higher value (denomination) to the existing customers.

a. Bundling the products are ways with the help of which banks build single product account into full product suites including a range of financial services. CRM products will enable the bank to see what products customers currently use, what products they are eligible for and what benefits can be provided to the customers if they add more products to their portfolio. The ability to have all information about your customers on the fingertips will help the Private bank increase sales.

Whenever a customer calls the toll free number of the bank or approaches the help desk, he should immediately be attended to. If not, this call should be re-routed to the right person who can address it. The information and query of the customer should be entered only once. With this data in the system, any representative can handle this customer query based on access to customer data. Improved access to this information can help call centers handle more calls, achieve greater productivity, reduced transaction time and achieve higher quality of service at lower cost. The bank can also support Web-based self-service capabilities: The Company Web site can be set up to provide inquiring customers personalized support information as well as the option to contact customer service staff by phone for additional assistance.

It would also be possible for the bank to understand the preferred mode of communication by the customers such as through SMS, call or sending notifications by the app to keep in touch continuously with the customer. The bank could also consider ranking their customers based on criteria and serve them accordingly. A high net value individual to get priority treatment.

To sum it up, a satisfied customer will spread a good word about the bank. Word of mouth plays a pivotal role in garnering more customers. If this customer is active on social media, he/ she can play a role in reaching more customers. With an effective CRM system the bank will realize many benefits including increased customer satisfaction, reduced direct-marketing costs, more effective marketing, lesser costs for customer acquisition and retention, identifying profitable customers, focused cross selling, decreased churn rate and improve bank reputation thereby attracting more customers.

MBA (Management) Questions on CRM

Question: What is CRM? What are the reasons for its growing importance in Modern business? Explain with industry examples? Do you agree with the statement that “ the focus in marketing is shifting from transaction to relationship?”

Question: What is the importance of the study of customer service profile for taking decisions related to CRM (customer relationship management)? Discuss the shape of customer service profile with examples.

Question: Explain in details by taking one example of any company, what do you understand by Operational and Analytical Customer relationship Management?

Question: What are the various components of sales force automation software solutions? Pick any company of your choice and show where and how all these components can or are being used ?

Question: Write detailed noted on the following: 1. Recovery paradox 2. Service marketing triangle 3. Customer Life Time Value.

Q. At a six-monthly review meet, the management of a Private sector bank in India realized they had lost a lot of customers to their competitors. An analysis of the reports indicated that bank has been unable to cultivate more profitable relationships with the customers’ which impacted its growth. Customers have expressed dissatisfaction at various levels right from delays in obtaining account related information to understanding their needs, preferences, and interaction history. The management has decided to invest in information systems to help them out. How do you think CRM system will help the bank? How will it create lasting relationships with the customers? How would creating these relationships help your bank?

Q) 10 Street Café is a chain you have started from scratch a few years ago. After breaking even, recently your cafés are gaining popularity and you are expanding your business. The growth is rapid and your staff seems unprepared for the increase in volume of customers and managing the interactions smoothly. On hiring a consultant to help you improve your customer experience, he recommends to invest in a Customer Relationship Management (CRM) system. As a consultant, how would you point out the benefits of CRM system to the client and highlight points to ponder before and during the implementation of such a system?

Q) What are the various different approaches to CRM? Which one do you find most pertinent in your career?

Q) You are the Chief Marketing Officer of a Branded Toy store in South Mumbai. Lately, it has been reported to you that your brand is making losses in comparison to a newly opened competitor Toy Store operating in your area. What can you do to reverse the losses & bring back your brand to profitability from a CRM perspective?

Q) You are the Head of a Private Hospital, namely ‘WeCare Hospital’ & lately, it has been reported to you that your hospital’s customer attrition is steadily increasing on a Year on Year basis. What would you do to arrest customer attrition & turnaround the fortunes of your Hospital? How will CRM help you in this effort?

Q) As the newly appointed CRM Head for Hero Motocorp, you have been tasked to implement a brand new CRM program in your organization.
a. What would be the best CRM implementation strategies that you will follow for your business?
b. What aspects of application architecture would you consider while implementing CRM at Hero?

Q) Navneet Motors showroom does a lot of business. The salespeople are always running from customer to customer, scrambling to meet the customer expectations and make them feel important. In this chaos, a salesperson could miss an opportunity to take note on a customer and the product he may be interested in. To address this issue, the general manager of the showroom has recently implemented a dealership performance CRM solution which his sales staff can use even on the go with the help of their mobile devices. This allows the members of the sales team to leave their desks and sell products to the customers face-to-face without losing any minute details of the customer. The salespeople can enter customer details into the CRM system because it is quick tool to use and convenient a sit is accessible through their phones. They are reminded later to go back in and edit each prospect on their computer. Identify three benefits and challenges Navneet Motors will face using the CRM module from any vendor. Justify your answer.

Q. PantMax Retail, through its subsidiaries, operates approximately 1000 departmental stores pan India. These stores hold a variety of merchandise including adult and children apparel, cosmetics, accessories, home furnishing etc. The management feels in order to increase their sales, PantMax needs to tailor its merchandise more to the local tastes, colors, sizes, brands which should be according to the sales pattern in each of the PantMax stores. For example, the stores in Mumbai might stock clothing in smaller sizes and brighter colors than those in Chennai, or the stores in Delhi may stock more makeup shades to attract trendier shoppers. How will information systems help PantMax implement this new strategy? Is this a suitable choice for the management to implement?

Q. The goal of service companies is to develop services that attract, keep customers satisfied, loyal and speak well of them. They use information and communication technology to get closer to the customer, create long-term relationships, and gain more knowledge from and about the customers to serve them better. As a major element of business strategy, firms are embracing CRM, because technological applications permit precise segmentation, profiling and targeting of customers. To deal with competitive pressures a customer-centric culture is required. The airline industry is no exception to this. Give an example of how an airline company has successfully implemented CRM to increase their profits and keep customers happy.

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