the current economic scenario, a well framed CRM strategy
can help retain customers and create avenues for more
(Customer Relationship Management) is probably one of
the most hyped management concepts in recent times.
Everyone, from the ever-expanding services and finance
sectors to traditional manufacturing companies have
adopted CRM or are in the process of adopting CRM solutions
in some form or the other. CRM is not new. It's actually
something India has traditionally subscribed to strongly.
As the saying goes "The
customer is God." CRM has been omnipresent in some
form or the other.
Picture this. My local grocer from whom I buy my monthly
from knows exactly what my requirements are and delivers
it to my house. This is mostly because he has a good
idea about what items I usually need and its quantity.
In case I may have forgotten to order a particular item
he reminds me. His judgement is based on the record
of my previous
purchase history. I have been his loyal customer for
over 40 years now.
This is just one example of primitive CRM.
why do you think is there so much hullabaloo over CRM?
A closer look at the situation brings out the realization
that we have been culturally tuned to the traditional
form of CRM. Try doing it with a million customers and
two million transactions a month, the task seems humongous.
As the number of customers, transactions, and interaction
increases, traditional CRM has to give way to technology-based
CRM. And its important for enterprises to understand
Smaller companies can resolve their CRM-related issues
by improving the attitude of the human capital that
they employ. You can gain a customer for life if your
employees are tuned to the customers needs. If your
organization has a larger customer base and greater
transaction volumes, in addition to being sensitive
and focussed, you should help employees be customer-centric.
Many times we make processes which facilitate companies
but make it hard for the customer.
With the complexities of business increasing and multiple
products lines being pushed through multiple channels,
the task of being customer-centric becomes more difficult
resulting in more misery to the customer. Technology-based
CRM can emerge as a savior.
A closer look
is how I define CRM: An enterprise approach to understanding
and influencing customer behavior through continuous
and relevant personalized communication to improve customer
acquisition, customer retention and customer profitability.
Enterprises have now optimized their operations and
profits have planed out as costs can no longer be minimized.
The focus is now on the customer as it provides the
much-needed impetus to the rapidly sinking bottom line.
These customers have a question, "Does your company
really know and understand me?" It becomes imperative
that companies today understand customer relationships
across the organization and look at the value of that
relationship for the complete organization and not across
a product or channel. CRM therefore is an enterprise
approach and partially integrated projects are rarely
Am I wrong?
question often asked by marketers is "Am I wrong
in trying to sell my product to my customer?" The
answer is "no you are not." Today we push
our products because we are desperate to sell and in
the bargain compromise on being sensitive to the customers
needs and his requirement. Would it not be wonderful
if we had a system that could at the beginning of every
day, pull out a list of only those customers, from the
millions in the database, who has a need for one of
your product and why he needs it?
All I then need to do is establish contact with the
customer and based on the need make a relevant offer
and close the deal. Such a system will help me contact
the customer only when he has a need. And the offer
made would be based on the understanding of that customer's
Other than understanding the customer's needs, it's
important to use the understanding to influence the
customer's behavior with relevant communication leading
to organizational benefit.
process of CRM is not as simple as it is advocated.
The first portion 'the enterprise approach' is by far
a challenge to achieve in India today. The current state
of our networks and computerization is the major deterrent
to achieving the 'single version of the truth.' Companies
today tell me that they have never collected data from
their customers, the data is not in an electronic form,
there is so much of duplication they could populate
very few fields, its branches are not networked, and
they have currently only summarized data. Despite these
problems you need to start somewhere, the earlier you
start the better. With every passing day the problem
will only get bigger.
Under such conditions, the first step would be to prioritize
the company's need for a CRM Solution. If you are doing
it because everybody is doing it, or because your CEO
has asked you to implement CRM, please don't proceed.
It will never succeed that way.
things are extremely important for any CRM strategy
to be successful. It needs to have unrelenting senior
management support and the CRM vision needs to be clearly
defined. You may have hundreds of problems currently
facing your organization, but you need to select the
business issue most important for you to resolve. This
would be your short-term goal.
Coming to a conclusion on this in itself is a big achievement.
Then you list out the other business issues you would
like the CRM strategy to resolve over a period of time
in terms of priority. This would form your final CRM
vision (or long-term vision). The starting point is
therefore a business discovery and if done correctly
will normally achieve these objectives.
The next step is to perform information discovery. You
have to create an information bank that will help you
understand the problem. An information discovery helps
you identify the information you need to help achieve
your short-term goal. You then need to establish certain
process changes to ensure the data is collected. It
could mean adding some fields to your application form
and ensuring that no form is accepted without all the
data being filled.
end goal is to populate the Data Warehouse with information
which will currently help you achieve your short-term
goals. As you start populating the warehouse you will
start getting a single breathtaking view of your business.
The first view that you get to see is what is happening
in your organization across products and channels for
all customers. The system would now notify you as soon
as a customer had defected to competition. You see customers
as they leave your organization because your are now
actively tracking all transactions. Once you know what
happened, you now gradually ask the question why? You
analyze the data to find out why customers are leaving
you. Based on the result you take necessary action.
The result of your action again finds its way to the
warehouse for future analysis.
The power to know what and why things are happening
will gradually move on to being able to predict which
customers are likely to leave you based on the behavior
patterns shown by customers who have left you in the
past. You can take action before the customer leaves
you thus achieving your short-term goal of reducing
customer defection by 2 percent and pocketing the savings
this achievement has brought. This is phase one.
Phase two takes off on the successful foundation of
phase one. The objective is to increase the cross sell
ratio by 5 percent. You perform an information discovery
process identifying the information currently available
and the information necessary to resolve this business
issue. As your data warehouse is up and running you
utilize the same infrastructure to resolve the next
The ROI from phase one will continue as you embark on
phase two. Here again as you load the relevant data
into the warehouse you begin to see a few answers to
important questions emerge. The questions are, what
happened in your business, what are the cross-sell opportunities
available today, and which opportunity am I loosing?
The next move is to identify why you are loosing these
opportunities. Understanding makes resolution easier.
The ability to predict what will happen will enhance
your capability to proactively react to these opportunities
and generate ROI in phase two. Phase three can be followed
in the same manner.
In an already stressed economy CRM is a process which
when implemented correctly will create the difference
between survival and extinction. But the key issue is
your understanding of true CRM. Remember without information
you cannot manage anything, not even your customers.
Sudesh Kuckian is Marketing Manager-SE
Asia, NCR Teradata and can be reached at email@example.com