Customer Relations Management


By
Kiran Babu
S2 MBA
Institute of Management in Kerala
Thiruvananthapuram
E-mail:
kiranbabu2020@yahoo.co.in
 


Marketing is the craft of linking the producers (or potential producers) of a product or service with customers, both existing and potential. Some form of marketing arises naturally in all capitalist societies but is not limited to capitalist societies. Marketing techniques are also applied in politics, religion, personal affairs, and many other aspects of life.

Marketing methods are informed by many of the social sciences, particularly psychology, sociology, and economics. Marketing research underpins these activities. Through advertising, it is also related to many of the creative arts. Successful marketers typically have a customer orientation or focus. The term "marketing" refers to the promotion of products, especially advertising and branding. However, in professional usage the term has a wider meaning. It can be divided into four sections, often called the "four Ps," only one of which is promotion. They are:

  • Product - The Product management aspect of marketing deals with the specifications of the actual good or service, and how it relates to the end-user's needs and wants.
  • Pricing - This refers to the process of setting a price for a product, including discounts.
  • Promotion - This includes advertising, sales promotion, publicity , and personal selling, and refers to the various methods of promoting the product, brand, or company.
  • Place or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing.

A marketer will use these variables to craft a marketing plan. For a marketing plan to be successful, the mix of the four "p's" must reflect the wants and desires of the consumers in the target market.

The ultimate satisfaction of  the customer is the prime goal of all marketing efforts. The success of a product lies at a point where it not only satisfies the customer but literally delights him. So customer satisfaction plays a crucial role in every aspects of marketing. When customers aren't happy with a particular business deal  they usually won't complain to the manufacturer - instead, they'll probably complain to just about everyone else they know - and take their business to your competition next time. That's why an increasing number of businesses are making follow-up calls or mailing satisfaction questionnaires after the sale is made. They find that if they promptly follow up and resolve a customer's complaint, the customer might be even more likely to do business than the average customer who didn't have a complaint. In many business situations, the customer will have many more interactions after the sale with technical, service, or customer support people than they did with the sales people. So if the manufacture is serious about retaining customers or getting referrals, these interactions are the ones that are really going to matter. They really should be handled with the same attention and focus that sales calls get because in a way they are sales calls for repeat business.

Now coming to the topic CRM stands for Customer Relationship Management. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.

CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. Finding and keeping customers is the heart of every business. In recent years, the concept of Customer Relationship Management (CRM) has been developed as a way for businesses to approach customer relations systematically and efficiently. Of course, businesses have always had relationships with customers. What is new about CRM is the focus on actively managing your customer relations in an organized and strategic manner. In practice, that means developing the company's internal operations, software and Internet capabilities so your customer relationships are more profitable. For example,  CRM  could be used to track key customer information such as accounts, buying histories and preferences so that the producer can match customer needs with product plans and offerings

CRM has many potential benefits. It can help companies identify their best customers, enrich and individualize customer contact, manage marketing campaigns, reduce customer response times, and serve wide geographical regions. All in all, it can help to build long-term, profitable customer relations. CRM is important because, fundamentally, it's cheaper and more efficient to retain your existing customers than to find new ones. The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can provide better customer service, make call centers more efficient, cross sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, discover new customers and increase customer revenues.

For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs. Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.

The CRM does not have to be a budget buster. A recent (2001) survey of more than 1,600 business and IT professionals, conducted by The Data Warehousing Institute found that close to 50% had CRM project budgets of less than $500,000. However, the same survey showed a handful of respondents with CRM project budgets of over $10 million.

Empire's Broker Services Application, which includes the quote engine and proposal configuration and enables online group enrollment, went live in October 2000. The browser-based quote engine frees brokers from having to call Empire to crunch numbers every time they need a quote. Instead, they can now enter the relevant customer data themselves online, and an automated formula generates a quote in a matter of seconds.

If the client isn't satisfied with a particular quote, the broker can go back online and change the specifications. Upon making a sale, a broker no longer has to wade through piles and piles of paper, but can go online to enroll a new account. The password-protected system also lets agents maintain customer information online, where it's accessible around the clock. By Oct. 31, 2001, all of Empire's 1,800 independent brokers had registered on the site, Bell says. When the site went live, Empire aimed for getting 15 percent of the brokers to use its self-service functionality. As of October, more than 45 percent were regularly generating their own quotes online. Empire agents using the site now handle an average of 45 percent more quotes; brokers who used to process 20 quotes a day, now handle 50. Most important, the enrollment process that once dragged out over 27 days now takes just two to three days to complete online.

When the focus is on the valuable customers, it is necessary to ensure that their value be based on the the total value of their relationship with your company , the potential value of their relationship, the profitability of their relationship, the insights they can provide your company, the influence that they wield over other customers. By thinking more insightfully about what the customers are really worth, one can focus the resources on attracting and keeping the right type of customers. This focus, in turn, will improve the productivity of their CRM efforts and will position him better for innovation and growth.

The guru of quality, W. Edwards Deming probably said it best:

"...it will not suffice to have customers that are merely satisfied. Satisfied customers switch, for no good reason, just to try something else. Why not? Profit and growth come from customers that can boast about your product or service - the loyal customer. He requires no advertising or other persuasion, and he brings a friend along with him."
 


Kiran Babu
S2 MBA
Institute of Management in Kerala
Thiruvananthapuram
E-mail:
kiranbabu2020@yahoo.co.in
 

Source : E-mail March 28, 2005

 
 
 

 

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