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Customer Relationship Management

1. Lecture. Customer Relationship Management. Explosion of CRM in Marketing & IT. Academicians “Darling” Global CRM Market - $42.8 billion. Enablers for Growth of CRM. Emergence of Service Economy Emergence of Market Economy Global Orientation of Businesses

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Customer Relationship Management

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  1. 1 Lecture Customer Relationship Management

  2. Explosion of CRM in Marketing & IT • Academicians “Darling” • Global CRM Market - $42.8 billion

  3. Enablers for Growth of CRM • Emergence of Service Economy • Emergence of Market Economy • Global Orientation of Businesses • Aging Population of Economically Advanced Economies

  4. Emergence of Service Economy

  5. Emergence of Market Economy Controlled Market-Oriented UNITED STATES CUBA Customer Focus Market Conditions Innovation Orientation Deregulation of Banking, Telecom, Broadcasting, Airlines Entrepreneurship Culture

  6. Global Orientation of Businesses • Emergence of Trading Blocs : NAFTA, EU, ASEAN • WTO • Increasing International Trade • Liberalisation of Markets

  7. Aging Population of Economically Advanced Economies

  8. Aging Population of Economically Advanced Economies • Slowdown in Birth Rate • Increase in Life Expectancy • Slowed Market for Traditional Goods & Services • Increase “Share of Wallet” • Deeper Understanding of Existing Customers

  9. Criticality of Customer Relationships • Non-Traditional Competition • Market Maturity • Misalignment between Revenue & Profits

  10. Non-Traditional Competition • Porter’s Theory • New Entrants • Reliance (Telecom) • Jet Airways • Substitute Technology • Kodak – Sony – Samsung (Cameras) • VoiP (Telecom) • Supplier as a Competitor • Nilkamal Plastics • Customer as a Competitor • Private Brands of Retail Chains

  11. Market Maturity • Excess Capacity • Agriculture • Automobiles • Telecom Bandwith • Slow or Negative Growth in Developed Economies

  12. Market Maturity Repeat Customers Mature Markets Capacity Creation Capacity Utilisation Emerging Markets New Customers

  13. Misalignment between Revenue & Profit Unit/$ Non-traditional Competition Customer Relationship Management Cost Revenues Biggest Smallest Customers

  14. Misalignment between Revenue & Profit • Customer Subsidisation • Large Accounts (Loss) • Traditional Accounting

  15. Why Biz. should adopt CRM? • Demand : Rising Customer Expectations • Supply : Affordable Technological Advances

  16. Rising Customer Expectations • Increasing Affluence in Emerging Economies • GIMC – 300 million • DINK • Outsourcing of traditional HH activities • Greater Awareness due to explosive media growth • C&S TV • Information Explosion leading to Raising Customer Aspirations • Customer Diversity • Mass Customisation

  17. Affordable Technological Advances Production Distribution Affordable Technological Advances Facilitation Consumption

  18. Affordable Technological Advances • Production • CAD-CAM • FMS • JIT • Distribution • CALS • TPL • Forecasting • Database Technology

  19. Affordable Technological Advances • Facilitation • EDI -- Extranet • Internet – Airlines, Banking • makemytrip.com – 150,000 users • Consumption • Personal IDs • Customer – Co-producer : Dell, Levis • Anytime Anywhere Business : ICICI Bank (48% ATMs, 11% Net & 11% Call centre)

  20. Implementing CRM • Lower Costs of Customer Retention • Increased Profits due to lower defection rates

  21. Challenges in Implementing CRM • Top Management Commitment • Change Management • Developing Customer-Centric Processes • Integration with legacy systems • Identifying & Establishing Performance Metrices • Evaluation of RoI

  22. Technology Focus Poor Implementation Plan No clarity of Purpose CRM : High Rate of Failure

  23. 3 Key Capabilities • Relationship Orientation : Mindset, Values, Norms of Organisation • Deepen knowledge of customers • Internal Integration and External Alignment with customers’ processes

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