The Importance Of Customer Relationship Management

Published Date: 02 Nov 2017

Unit 4.11: Customer Relationship Management

Name: Momtaz Akter

Student ID: 1001

Table of Contents

Introduction

Modern business tends to build a relationship with customer whereas traditional business deals with customer to interact once. It emphasizes in a way of having business not to serve customers once, whereas serve as to serve afterwards. . Indeed this revolution in business lead to a new term customer relationship management (CRM), which has been referred to as the new "mantra" of marketing. The versatility of Information technology, specifically World Wide Web (www) spikes the opportunity to every business to deal with customer in this new formation.

1 The Importance of Customer Relationship Management (CRM) and the achievement of CRM (Task 1)

1.1 Key aspects of CRM

Defining CRM: Customer relationship management (CRM) is a widely implemented model for managing a company’s interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processes—principally sales activities, but also those for marketing, customer service, and technical support. The overall goals are to find, attract, and win new clients, nurture and retain those the company already has, entice former clients to return, and reduce the costs of marketing and client service

There are several aspects of customer relationship management which are related to each other and play a key role in the outcome of the entire process.

External Relationships: Business to business relationships which includes relationships with partners, suppliers and distributors or retail channels. This is a completely external network that works as a support system for internal networks.

Data Analysis: Customer data to be analysed is added constantly and is combined with predictive analytics to plan out and strategize targeted marketing campaigns, newer product models, conceive new strategies and lastly to analyse the very success of the CRM model.

Customer interaction channels: Customer interaction channels are a direct indicator of the success or failure of a CRM model and needs to be constantly monitored. A better business has fewer calls/emails, lesser escalations and a high customer satisfaction to dissatisfaction.

1.2 Benefits of good CRM

CRM provides variety of benefits such as psychological incentive to profit increasing. With a CRM system the company makes their customers partners, not just business objects.

Increase Customer Lifecycle Value: In modern times business just not only hunt customer but also support a customer to survive with this company as its lifecycle last. Proper CRM can increase the lifecycle of customer –Business relationship.

Strategic Consistency: CRM offers business and technological alignment, to achieve strategic company goals more effectively. Additionally, the alignment results in a more consistent customer communication creating a feeling of continuity.

Increase Efficiency: Sales, service and support staffs deal more effectively with customers because they have to a complete view of all customer interactions by instance. Collecting vital data, like customer details and order histories, detailed profiles such as customer preference can be done by at ease.

1.3 Impact of quality management systems on CRM

For enterprises that depend on customer relationships to generate sales, better business outcomes and future opportunities, the quality of those relationships is absolutely vital. Proactive organizations are now taking a more expansive and innovative approach to quality management (QM) in contact centres and other customer relationship management (CRM) efforts. By leveraging a broader array of QM capabilities, organizations can reduce costs, gain peace of mind through reduced risk, improve customer satisfaction and create new revenue opportunities. A reliable quality system must ensure that all products, services, and solutions are at edge to meet the CRM of an organization effectively.

1.4 Necessary process for achieving effective CRM

The CRM model or CRM process is one of the more central subjects in the business world. We simply can’t deny its impact and sheer dimension. Understanding the process of CRM is worthwhile to implement the CRM. A proper CRM system can lead the objective to its success. The CRM process involved with few steps.

Step 1: Clearly Identify Target Market & Value Proposition

Step 2: Define Overall CRM Strategy and Consider Costs

Step 3: Define How Each Customer Type will be handled

Step 4: Select CRM Software to Measure Performance

Step 5: Continue to Re-engage Customer.

1.5 Role of internal staff in achieving effective CRM

CRM requires a certain level of integrated knowledge that consists of IT, Business, Psychology, Marketing and variety of subjects. So it is a pre-requisite to have certain level of knowledge to implement CRM properly. The effectiveness of CRM also requires cooperation and support of employees throughout the organization.

A fully functional CRM solution requires input, support, and participation from many parts of the organization. To gain acceptance and support for CRM, managers must understand the overall organizational benefit; the rewards and responsibilities of the individual department must be congruous with organizational CRM effort.

1.6 Role of external stakeholders in achieving effective CRM

The success of CRM implementation lays in its acceptance for use by the various external stakeholders. Taking a stakeholder focus to any business or civic venture ensures a higher probability of completion and success of such a venture.

Customers are one of most important type of external stakeholders. Organizations make their products based on the demands of the customers to maximize their satisfaction. .There are different groups that need to be accommodated in a stakeholder management plan such as shareholders, Vendor, Backward linkage, different interest group. CRM works effectively in situations where the business is relatively stable and there is a large class of stakeholders interacting with the business in a reasonably consistent way.

2 The Role of Loyalty Scheme in CRM (Task 2)

2.1 Use of loyalty scheme to gain information about customers

According to Inc., it costs a business about 5-10 times more to acquire a new customer than it does to sell to an existing one - and on average those current customers spend 67% more than a new one. So the scenario is very straight cut that a business has more value of existing customer than that of new one.

2.2 The use of customer information to inform marketing and customer service policy

Today, marketing managers have realized that firms' assets are their customers and their marketing focus has been shifted from being "marketer-centric" to "customer-centric." The traditional process of mass marketing is being challenged by the new approach of interactive marketing, otherwise known as one-to-one marketing. Recognizing the increasing importance of customer information for moving towards a more customer-centric orientation, companies from all types of industries, ranging from manufacturing to information, are exploring customer information management and decision support systems as promising means of differentiation, competition, and revenue growth opportunities. Empowered by software and internet technology, firms have developed innovative tools and methods to uncover heterogeneity in customer preferences (e.g. taste, cost to serve, and sensitivity to firm's decision variables) and adopt customized interventions (e.g. promotion, advertising, and product design) that are relevant to the status and preference of each individual customer.

3 A Case Study of Customer Relationship Management (Task 3)

3.1 Review of CRM in Vodafone Limited UK

Vodafone Ltd. is UK’s leading mobile telecommunications service provider whose subscriber base consists of prepaid (97%) and post-paid (3%) cell phone users.

Vodafone Ltd. engaged Oracle Partner Wipro to deploy Siebel customer relationship management (CRM) products. Customer data such as names, addresses and transaction information are stored in the Oracle Database 11g.

"The Siebel CRM and communications system helped us create more targeted campaigns and has improved customer service, which played a key role in the 56% growth of our subscriber base to 36 million in two years," said by the General Manager and head of enterprise planning, Vodafone Ltd.

Vodafone uses CRM for different operations:

Vodafone CRM system performs customer services to achieve customer loyalty.

Vodafone is the leading operator in Bangladesh for customer caring and billing system. This includes different Govt. utilities bills, such as electricity bill, Gas bill etc.

Sales, marketing and Contract Management of Vodafone.

Vodafone supports different sort of Loyalty program, such as: Thank you partnership program.

3.2 Proposed improvements to CRM process

Vodafone as a telecommunication operator mostly engaged with IT related job. After using the mentioned program, the company now using different sort of CRM tools to build customer loyalty. Now a day the company is using:

CCPS (Customers connection status)

MCA

Call Block Service,

FnF change,

Mobile Back up etc.

The company is observing the 2G network services, whereas within next year 2013 the company is going to apply for 3G services, which allow the company to have video call and other extra facilities. That will create a new dimension in the service of this company.

3.3 Proposed improvements to the role of staffs in promoting good CRM

A business like Vodafone with high dimension needs to have proper staffing procedure that lead the company to its hallmark position. Vodafone always employ the best supportive team in this country whom are dynamic, passionate.

Vodafone CRM Staff provides with 24x7 self-service accesses to vital information, and enables the organization to share information online based on the specific needs and policies of your administrative offices. CRM Staff provides the tools with up-to-date with their proper information to customer. CRM system needs a strong supporting team to maintain it

3.4 Plan for the implementation of improvements

Customer satisfaction can be increased by the customer service department but they need to follow bellow things:

Vodafone needed to expand their facility like increase the number of employee though they are using CRM but they need more customer manager.

A negative impact on customer mind, for solving a single problem they have to spend 6 to 7 taka. So, Vodafone should decrease the call waiting time along with the rate of talking.

Customers are the key role player for every organization, so the CRM system should manage the way customer by its way that supports the customer mostly.

Conclusion

Customer relationship management (CRM) is a set of strategies, processes, and associated technology enablers designed to improve the interactions and engagement of customers. It helps any company to retain their present customer, and make a strong bondage with the customer which makes more profit for the company. For this reason customer gets the super facility. So finally we can say that without CRM effective and efficient customer service is not possible and also it is not possible to retain existing customer.