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Customer Relationship
Management
Prepared By
Jitendra Patel
Assistant Professor
Prestige Institute of
Management and
Research, Indore

Content
1. Customer Relationship Management (CRM)
Definition.
2. Purpose and Benefits of CRM
3. Relationship Marketing
4. Components of CRM
2/28/2020 2Jitendra Patel, Assistant Professor, PIMR

Customer Relationship Management (CRM) can
streamline and automate your business processes.

CRM = Customer Relationship Management
A CRM system is a business tool that allows you to
manage all your customers, partners and prospects
information all in one place.
For example, it helps:
•sales teams close deals faster
•marketing manage campaigns and track lead generation
•service call centres reduce the time to resolve customer
complaints

To successfully undertake CRM initiatives it is essential
to :
• Clearly define the management objective & strategy
• Evolve the right process around it
• Identify the right software solution for implementation
• Understand the hidden costs and hurdles
• Back it up with good training and support
•While selecting the software solution for your
implementation, ensure that It can manage both your
data and process
• It is easy to implement and roll out
• It is simple to use
• You understand the total cost of ownership
• You evaluate the risk exposure2/28/2020 6Jitendra Patel, Assistant Professor, PIMR

Advantages Of CRM
Using CRM, a business can:
• Provide better customer service
• Increase customer revenues
• Discover new customers
• Cross sell/Up Sell products more effectively
• Help sales staff close deals faster
• Make call centers more efficient
• Simplify marketing and sales processes

• Relationship marketing has the aim to
building mutually satisfying long term
relationship with key parties in order to
earn and retain their business.
• Relationship marketing builds strong
economic, technical and social ties among
the parties
• -KOTLER

Customer loyality and satisfaction
• Highly satisfied customer are ;
• Less price sensitive
• More likely to talk favourably about product
• More likely to refer products to others
• Remain loyal for long

5 levels of relationship marketing
• Basic marketing
• Reactive marketing
• Accountable marketing
• Proactive marketing
• Partnership marketing

• Basic Marketing – The salesperson sells to the
final customers. This is also known as direct
sales.
• Reactive Marketing – The sales person sells the
product and encourages the customer to call for
any comments or enquiries.

• Accountable Marketing – The sales person calls
the customers to ensure whether the product is
working as per satisfaction and if there is any
problem in the product. Furthermore he also
asks the customer for any suggestions / feedback
to improve the service / product. Thus he is
taking responsibility for the sale.

• Proactive marketing – The company works
continuously with its large customers to help
improve performance. This is especially seen in
financial companies wherein the movement in
the financial market induces the company to
make changes regularly. However at the same
time, these financial companies have to take care
of their customers as well. Thus they take regular
feedback from their large customers thereby
developing their products accordingly.

• Partnership Marketing – The company works
continuously with its large customers to improve
its performance.

10 Critical players in rm
1. Supplier
2. Distributors
3. End users
4. Employees
5. Financial firms
6. Government
7. Media
8. Allies
9. Competitors
10. General public

Relationship Marketing and the 4Ps
Product
• More products are customized to the customers’
preferences.
• New products are developed and designed
cooperatively with suppliers and distributors.

Price
• The company will set a price based on the
relationship with the customer and the bundle of
features and services ordered by the customer.
• In business-to-business marketing, there is more
negotiation because products are often designed
for each customer.

Distribution (Place)
• RM favours more direct marketing to the
customer, thus reducing the role of middlemen.
• RM favours offering alternatives to customers to
choose the way they want to order, pay for,
receive, install, and even repair the product.

Communication (Promotion)
• RM favours more individual communication and
dialogue with customers.
• RM favours more integrated marketing
communications to deliver the same promise and
image to the customer.
• RM sets up extranets with large customers to
facilitate information exchange, joint planning,
ordering, and payments.

Properties of relationship marketing
• Collaboration
• Commitment, Dependency
• Trust, risk and uncertainty
• Power
• Longevity
• Frequency, regularity and intensity
• Closeness and remoteness

Ikea – The Swedish furniture maker has a worldwide base of
intensely loyal customers. When the company changed the
font in their ubiquitous catalog, Ikea lovers took to the
Internet to air their complaints. Rather than alienate their
customers for a trivial reason, Ikea changed the font back in
the next catalog.
American Airlines – The airline maintains a comprehensive
frequent flyer program that rewards customer loyalty with
the promise of free flights, upgrades, and discounts.
Dell – Dell computers created a special online store for high
volume corporate customers. By tailoring the ordering
process to the specific customer's needs, Dell was able to
expedite many of the hassles corporate technology buyers
face. Providing a higher level of service leads to increased
loyalty.
Examples

• Classification of CRM programs
– Loyalty program
– Prospecting
– Save or win back
– Cross-sell/up-sell
• eCRM: Customer relationship management
conducted electronically

Components of CRM
• Customer and Product
centric services
• Differential Marketing
– Mass marketing
– Focused marketing
– One-to-one marketing
• Customers are not born
equal
Sales
Managment
Database
Marketing
Marketing
Management
Service
Managemen
t
Customer
Managemen
t

References
1. Boone and Kurtz , Contemporary Marketing, 16th edition,
Cengage Learning, 2014
2. Philip Kotler and Gary Armstrong “Principles of
Marketing”, New Delhi, Prentice Hall of India, 15th Edition, 2013.
3. Philip Kotler, Kelvin Lane, Keller, Abraham Koshi, Mitihlesh Jha,
Principles of Marketing Management, South Asian Perspective,
Pearson Education, 14th Edition 2011.
4. Preact CRM, “The Insider Guide to Success with CRM”, Microsoft
Partners.
5. Sales Force, “Deciding which crm solution is right for you Part of
the Crm success series”, Sales Force Sales Cloud.
6. Tech Target, Battle of CRM Tools, Search CRM, PRO+Content.

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