E-Marketing

Think about CRM-
Customer Relationship Management

By Smriti Shrestha

-Demanding customers
-Fierce competition and
-Breath taking technology innovation

These are the harsh realities of today’s marketplace- realities that have changed the way we do business, especially the way we handle the customers. Gone are the days when sales people could rely on choosing the small talk and aggressive selling techniques alone to generate business. Today the customer is in total command. The customer have information on their fingertips, knows about the different choices available and has the necessary means to access them, making it difficult for the seller to cater to their needs. The customers will buy or listen to the seller only if the customer perceives the seller to be helping them in their purchase decision process. But then a sales person has to deal with many customers. So how does it become possible for him/her to possibly know about each prospect and build long-term relationship with each of them so he/she can influence each of them to buy from him/her as each prospect goes through different stages of the decision making process?

This is where the CRM comes into the picture.

CRM is a process of creating and maintaining relationships with business customers or consumers. CRM is a holistic process of identifying, attracting differentiating and retaining customers. It involves more than just simply listening to customers or providing better products and customer service. It means a two-way communication with an individual customer, once at a time. A company using CRM marketing focuses on differentiating individual customers based on their needs rather than differentiate products for target groups of customers.

For instance, in a CRM focused beauty parlor the following activities would occur:

• A customer calls for an appointment; the receptionist knows her as a regular customer and greets her.
• Of the many parlor attendants she forwards the call to Mrs. Geeta (say) because she knows that she has been tending the particular customer since past 5 months and also that the customer prefers Mrs. Geeta.
• Mrs. Geeta greets her in a friendly manner and also asks how her kids are. She also asks her how the colour of her hair is after dyeing it 3 weeks back.
• Mrs. Geeta fixes an appointment with her at 2 p.m. as she knows that she works part-time in the morning.
• The parlour’s administrator makes sure that the necessary and the most likely to be required items are in stock at the parlour when the customer arrives.
• When the customer arrives, Mrs. Geeta asks her about the visit she is planning to her in-laws’ house for a marriage.
• The customer asks her about the new look that she wants for herself especially because of the wedding ceremony. She especially wants to try a Burgundey colored dye for her hair to hide the white hairs.
• Mrs. Geeta honestly tells her that the dye is not suitable for her hair or her look.
• The customer believes Mrs. Geeta and drops the idea.
• She believes that Mrs. Geeta would try her best to make her as beautiful as she can. She is convinced by Mrs. Geeta’s suggestion that she should try to use henna only to color her hair.
• She also seeks Mrs. Geeta’s suggestion on how to use makeup for the day during the wedding.
• She sets another appointment with her for a facial massage, (another service) after listening to Mrs. Geeta’s advise on face care.

What is remarkable about the above situation is that beginning from the receptionist each of the staff at the parlour know the details about the preferences of the customer and what service would she be looking unto if she wanted their service.

Thus the core of CRM is the idea that a company’s profitability increases by satisfying the individual needs one at a time.

The CRM process can be defined as:

a. Identifying the customers of the company which includes identifying the business and the end customers and also their profiles and behaviour

b. Differentiating customers by their needs and customer value to the company

c. Customizing the offerings of the company to various customers according to their characteristics, behaviour, needs or value.

With the masses of the internet users growing worldwide, by using the tools like cookies (small files that are written to the user’s hard drives when the users visits a site, which helps to track the visitors behaviour) and weblogs (log files recorded and monitored on a server every time a visitor visits a site), the internet has made it possible to monitor consumer behaviour in a most cost effective and timely manner. This was not possible before the Internet except with industrial products where the numbers of buyers are less. In a CRM process, it is through customisation that firms zero-in on the precise needs of each prospect and customer and thus build long-term relationships. And the internet has also made it possible for the marketers to carry out that efficient automated customisations can be done to suit the requirements of an individual business customer.

Important tools that aid firms in customizing products to small groups or individuals include collaborative filtering, data mining and profiling and outgoing e-ail.

Collaborative filtering is the software that performs the function of automatically gathering opinions Of-like minded users on particular products services or ideas and so as to make predication for an individual a result of which the individual receives a tailor made solution to the individual’s preference. Netperceptions is an example of collaborative filtering software. Companies like Bid.com and Lowe’s Cos- The $18.8 billion Wilkesboro, N.C., home-improvement retailer, uses this software to analyze its customers. By collecting and analyzing point-of-sale data from cash registers, Lowe’s expects to learn how specific products and consumer traffic interrelate with the help of the software. That way, when the marketing department lays out a flier, they’ll know what products to include (or avoid) in which regions.

Data mining involves the extraction of information regarding patterns of interest from large databases while customer profiling uses data warehouse information to help marketers understand the characteristics and behavior of specific target groups. Companies uses software like E.piphany for data mining and profiling so that they can present product offering and promotional messages that will have higher appeal to the selected group of their targeted prospects. For instance Nissan uses this software to sell Sentra -a model of its automobile to customers fitting the profile of its current customers of the models. Other big companies of the world are also found to be using the services of such data mining softwares.

Outgoing email from the company to the customer is yet another ‘application’ that marketers use to build relationship with individual customer. Companies such as Travelocity uses it extensively to provide appropriate, timely and customized solutions to each of its customers. All a customer needs to do is simply enter his/her itinerary and they would receive email alerts when the fare of the airline drops or there are certain special offering provided by the hotels or there are special events going on in the destination desired to be visited and so on . The result - it makes the customer feel as if they are dealing and listening to a friend who is ready to help him/her in each stage of his planned journey.

Without a clear idea of how to increase perceived value for the customers, just buying the CRM softwares is not the way of implementing CRM in an organization. As mentioned earlier, CRM has to be followed in a process. A company must review the business process, applications and technologies it uses to deal with customers, the budget that is available and above all what it hopes to gain from a CRM implementation. CRM should be measured on its desired goals-based on direct outcomes of its underlying activities-whether it’s lowering staffing cost, speeding response time, increasing product development cycles or lowing billing errors.

ROI perhaps is the great long-term goal for any company as a result of investing on CRM. But in the short term it would thus be better for a company to measure the effectiveness of implementing CRM based on direct outcomes of the new processes such as lowering the number of late credit collection or increasing the number of desired customers instead of the broader ROI which is a function of too many independent variables.