SY-MBA(BA)

RSL8PE04A

Customer Relationship Management

(CRM)
(Unit-I)
Customer Services & Relationship Marketing
Introduction

-Prof. Dr. Satish Chinchorkar

PhD., BE (Mech)., MBA., [Link]., CQA., COBIT5
Content: Introduction

1.1. Basics of Services: Definition, Importance of Services Marketing,

Difference between Products & Services

1.2. Characteristics of Services: Intangibility, Inconsistency, Inseparability and

Inventory; Search, experience and credence attributes

1.3. Definition, Emergence of CRM Practice, Factors responsible for CRM

growth, CRM process, framework of CRM, Benefits of CRM,

1.4 Types of CRM, Scope of CRM, Customer Profitability, Features Trends in

CRM, customer interaction & touch points

1.5 CRM and Cost-Benefit Analysis, CRM and Relationship Marketing

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1.1. Basics of Services: Definition

 A service is an intangible offering that provides value to

a customer. Services are often described in terms of
their attributes, such as reliability, responsiveness,
and quality. In many cases, services are also
distinguished from goods by their perishability—that is,
they cannot be stored for future use.
 There are four characteristics of service: Intangibility,
Inseparability, Variability, and Perishability (Kotler
and Keller, 2007). As service's nature is intangibility,
therefore manufacturing and service delivery is more
complex than a product.
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1.1. Basics of Services: Services
Marketing

 Service marketing provides an avenue to

showcase unique service offerings, exceptional
customer experiences, and customized
solutions, setting businesses apart from the
competition.
 The 7P's of Service Marketing includes Product,
Price, Place, Promotion, People, Process, and
Physical Evidence.

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1.1. Basics of Services: Importance of
Services Marketing

 Differentiation: Organizations must differentiate themselves from their competitors in

a crowded marketplace. Service marketing provides an avenue to showcase unique
service offerings, exceptional customer experiences, and customized solutions,
setting businesses apart from the competition.
 Customer Loyalty: By delivering excellent service experiences, organizations can
foster customer loyalty and build long-lasting relationships. Satisfied customers are
more likely to become repeat customers and brand advocates, leading to increased
referrals and positive word-of-mouth.
 Revenue Generation: Effective service marketing can drive revenue growth by
attracting new customers and encouraging upselling or cross-selling opportunities.
When customers perceive value in the services provided, they are willing to pay a
premium, leading to increased profitability.
 Reputation and Trust: A strong service marketing strategy helps build a positive
reputation and instils trust in consumers. When customers have confidence in an
organization's ability to deliver on its promises, they are likelier to choose that
service provider.

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1.1. Basics of Services: Difference
between Products & Services

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1.2. Characteristics of Services:
Intangibility

 Intangibility means impossible to touch, to describe exactly, or

to give an exact value.
 Service intangibility means that services cannot be seen,
tasted, felt, heard or smelled before they are bought. You
cannot try them out. For instance, airline passengers have
nothing but a ticket and a promise that they will arrive at a
certain time at a certain destination. But there is nothing that
can be touched.
 Services are not physical and cannot be "possessed."
Because they can't be seen, touched, or made tangible in
some way, assessing their quality and value is difficult. A
services client will never know how good the service is until
after he receives it.
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1.2. Characteristics of Services:
Inconsistency

 Inconsistency is a characteristic of services that refers to

the fact that services cannot be perfectly standardized.
This is because services are performed exclusively each
time, and the quality of the service may vary from time to
time, even if the service provider remains the same. This
is due to different customers having different demands
and expectations.
 There can be no perfect standardization of services.
Even if the service provider remains the same, the
quality of the service may differ from time to time.

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1.2. Characteristics of Services:
Inseparability

 One unique characteristic of services is that the

service and the service provider cannot be separated.
 Inseparability is a characteristic of services that refers
to the idea that the production and consumption of a
service cannot be separated. In other words,
customers typically purchase and use a service at the
same time.
 It also requires that a customer is physically
participating in the consumption of the service. So that
means every part of the experience is tied together.

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1.2. Characteristics of Services:
Inventory

 Services are perishable and cannot be stored in

inventory, which is a key difference from products.
 Service inventory is a management accounting
concept that refers to the amount of service a
business can provide in a given period.
 Unused service capacity can't be stored for later
use, so if a service isn't used today, it's lost
forever.

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1.2. Characteristics of Services: search,
experience and credence attributes

 Search, Experience, and Credence (SEC) is a model that

economists and marketers use to analyze how customers
buy goods and services. The model is based on how easy
or difficult it is for consumers to evaluate or obtain
information about a product or service.
 Service providers can use the SEC model to inform
potential customers, manage expectations, and build trust.
For example, service providers can communicate
experience attributes to help customers understand what to
expect from the service. They can also build trust by
demonstrating expertise, sharing customer testimonials,
and highlighting certifications or awards.
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1.3. CRM Definition

 CRM stands for customer relationship

management, which is a business strategy and
system that helps companies manage their
interactions with customers and prospects. The
goal of CRM is to improve customer relationships
and grow a business.
 The purpose of a CRM system is to streamline
how businesses manage and nurture their
relationships with customers and prospects.

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1.3. CRM Definition

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1.3. Emergence of CRM Practice

 CRM originated in the early 1970s when the

business units had a manifestation that it would be
advisable to become 'customer emphatic' rather
than 'product emphatic'.
 Customer relationship management was
popularized in 1997 due to the work of Siebel,
Gartner, and IBM. Between 1997 and 2000, leading
CRM products were enriched with shipping and
marketing capabilities. Siebel introduced the first
mobile CRM app called Siebel Sales Handheld in
1999.
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1.3. Factors responsible for CRM
growth

Technological Advancements
 Cloud Computing: Cloud-based CRM solutions make it easier for
businesses to access, scale, and manage customer data. They offer
flexibility, lower upfront costs, and increased accessibility from
various devices.
 AI and Machine Learning: The integration of artificial intelligence
and machine learning into CRM platforms has enhanced data
analysis, predictive analytics, automation, and personalized
marketing, driving growth and efficiency.
 Mobile Accessibility: With the rise of mobile devices, CRM
systems are now more accessible to sales teams, customer service
representatives, and managers, enabling better decision-making
and faster response times.
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1.3. Factors responsible for CRM
growth

Increased Customer Expectations

 Personalized Experiences: Customers expect
businesses to offer tailored products, services, and
experiences. CRM systems help businesses gather
insights from customer data and provide personalized
interactions.
 Omni-channel Communication: CRM systems allow
businesses to engage customers across multiple
channels (email, social media, live chat, phone, etc.),
creating a seamless customer experience.

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1.3. Factors responsible for CRM
growth

Improved Customer Data Management

 Centralized Data: CRM platforms enable businesses to
consolidate customer data from various touch points,
creating a unified view of the customer, which improves
decision-making and customer engagement.
 Data-Driven Insights: CRM systems allow for advanced
analytics, helping businesses understand customer
behaviors, preferences, and buying patterns to drive
better marketing, sales, and service strategies.

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1.3. Factors responsible for CRM
growth

Automation of Processes
 Sales and Marketing Automation: CRM solutions
automate routine tasks such as follow-up emails, lead
scoring, and social media posts, freeing up time for more
strategic activities and boosting productivity.
 Customer Support Automation: Automated ticketing,
chatbots, and self-service portals enhance the efficiency
of customer support teams and improve response times.

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1.3. Factors responsible for CRM
growth

Cost Efficiency
 Lower Operational Costs: CRM software, especially
cloud-based platforms, reduces the need for physical
infrastructure and manual processes. This reduces
overheads and lowers the overall cost of running CRM
systems.
 Scalable Solutions: CRM platforms can be easily
scaled to accommodate the growth of a business,
making them suitable for both small businesses and
large enterprises.

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1.3. Factors responsible for CRM
growth

Focus on Customer Retention

 Customer Loyalty Programs: CRM systems enable
businesses to track customer engagement, implement
loyalty programs, and manage customer satisfaction to
foster long-term relationships and repeat business.
 Proactive Customer Service: CRM helps businesses to
anticipate customer needs and issues, allowing for
proactive customer service that enhances loyalty and
retention.

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1.3. Factors responsible for CRM
growth

Integration with Other Business Functions

 Cross-Departmental Collaboration: CRMs integrate
with other business tools like Enterprise Resource
Planning (ERP), email marketing software, and customer
support platforms, enabling cross-functional
collaboration and better decision-making across the
organization.
 Seamless Workflow: Integration with marketing
automation, sales tools, and analytics platforms ensures
a seamless workflow, from lead generation to closing
deals and providing customer support.
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1.3. Factors responsible for CRM
growth

Globalization and Competitive Pressure

 Global Reach: As businesses expand globally, CRM
systems allow companies to manage relationships with
customers across different geographies, languages, and
time zones.
 Competitive Advantage: With more companies
adopting CRM solutions, businesses need to leverage
CRM to differentiate themselves, streamline operations,
and provide superior customer service to stay
competitive.

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1.3. Factors responsible for CRM
growth

Social Media Integration

 Engagement through Social Media: Social media
platforms are integral to CRM strategies, as they allow
businesses to engage with customers directly and build
stronger relationships, improving brand loyalty.
 Real-Time Customer Feedback: Social media
integration enables real-time customer feedback, which
can be used to improve products, services, and
customer interactions.

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1.3. Factors responsible for CRM
growth

Shift Toward Data-Driven Decision Making

 Analytics and Reporting: CRM systems provide
businesses with comprehensive analytics and reporting
tools that help track performance, customer behavior,
and ROI, allowing for data-driven decisions that lead to
improved outcomes.
 Customer Insights: By analyzing customer interactions,
behaviors, and preferences, businesses can make
informed decisions about marketing strategies, sales
tactics, and customer engagement.

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1.3. Factors responsible for CRM
growth

Regulatory and Compliance Requirements

 Data Privacy Laws: Increased regulatory pressure,
such as GDPR, requires businesses to manage
customer data securely and responsibly. CRM systems
help ensure that businesses comply with these
regulations.
 Transparency: CRM solutions provide a transparent
view of customer interactions, making it easier for
businesses to meet compliance standards and improve
trust with customers.

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1.3. CRM Process

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1.3. CRM Process

The CRM process is a

strategy for keeping every
customer interaction
personalized and meaningful
that consists of five main
steps.
A customer relationship
management system (CRM
system) provides the data and
functionalities your team
needs to execute this strategy
and ultimately turn leads into
customers.

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1.3. Framework of CRM

A customer relationship
management (CRM) framework
is a plan that outlines how a
business will manage and grow
its customer relationships. It
includes the tools and activities
that will be used to carry out the
plan. A CRM framework helps
businesses focus on the
practical implementation of their
CRM strategy.

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1.3. Benefits of CRM

Improved Customer Service

 Centralized Customer Information: CRM systems
store comprehensive customer data in one place,
enabling customer service teams to access relevant
information quickly, resolve issues efficiently, and offer
more personalized support.
 Faster Response Times: With access to accurate data
and communication history, businesses can respond to
customer queries or complaints more quickly, leading to
higher customer satisfaction.

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1.3. Benefits of CRM

Enhanced Customer Relationships

 Personalized Interactions: CRM platforms help
businesses understand customer preferences, past
purchases, and behavior, allowing for more tailored
communication and offers that resonate with individual
customers.
 Consistent Communication: A CRM system helps
ensure that customers receive consistent messages
across different touch points (email, phone, social
media), reinforcing trust and loyalty.

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1.3. Benefits of CRM

Increased Sales and Revenue

 Lead Management and Nurturing: CRM tools assist in
tracking and managing leads, ensuring that sales teams
can prioritize high-potential leads, nurture them
effectively, and increase the chances of conversion.
 Sales Forecasting and Analytics: CRM systems
provide insights into sales performance, enabling
businesses to forecast future sales, identify trends, and
make data-driven decisions to optimize sales strategies.

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1.3. Benefits of CRM

Improved Marketing Efforts

 Targeted Marketing Campaigns: By using customer
data from the CRM, businesses can segment their
audience and run more targeted and personalized
marketing campaigns, leading to higher engagement and
conversion rates.
 Better Return on Investment (ROI): CRM tools help
track the effectiveness of marketing campaigns,
providing insights into which strategies yield the best
results and optimizing marketing spend.

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1.3. Benefits of CRM

Increased Productivity and Efficiency

 Automation of Routine Tasks: CRM systems automate
tasks such as follow-up emails, data entry, and customer
segmentation, allowing employees to focus on higher-
value activities and boosting overall productivity.
 Task and Activity Management: Sales teams can
manage tasks, meetings, and customer interactions from
within the CRM system, ensuring that important follow-
ups are not missed and activities are tracked.

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1.3. Benefits of CRM

Better Collaboration Across Teams

 Unified Data for All Teams: A CRM system
consolidates customer data, allowing marketing, sales,
and customer service teams to have access to the same
information. This ensures better collaboration and
alignment across departments.
 Shared Goals and Metrics: Teams can set common
goals, track performance, and share insights across
departments, promoting a unified approach to customer
relationship management.

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1.3. Benefits of CRM

Improved Data and Analytics

 Customer Insights: CRM systems provide deep
insights into customer behavior, preferences, and buying
patterns, helping businesses make informed decisions
about product offerings, marketing strategies, and
customer engagement.
 Comprehensive Reporting: CRM platforms offer robust
reporting tools that help track sales performance,
customer interactions, campaign effectiveness, and
more, enabling businesses to measure success and
identify areas for improvement.
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1.3. Benefits of CRM

Increased Customer Retention

 Loyalty Programs and Follow-Ups: CRM systems help
businesses track customer engagement and provide
opportunities to create loyalty programs, follow up on
previous interactions, and ensure that customers feel
valued and appreciated.
 Proactive Service: With CRM tools, businesses can
anticipate customer needs, address concerns before
they become problems, and create a more proactive
approach to customer service.

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1.3. Benefits of CRM

Streamlined Workflow and Operations

 Integration with Other Tools: CRM systems can
integrate with other business systems like ERP,
marketing automation tools, and communication
platforms, streamlining operations and ensuring a
smooth flow of information.
 Process Standardization: CRM systems help
standardize processes across departments, ensuring
that tasks are executed efficiently, and customer
interactions follow a consistent approach.

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1.3. Benefits of CRM

Better Decision-Making
 Real-Time Data Access: CRM platforms provide real-
time access to critical customer data, enabling
leadership and teams to make informed decisions based
on up-to-date information.
 Strategic Planning: With insights gained from CRM
analytics, businesses can plan more effectively, identify
new opportunities, and optimize their strategies for
growth.

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1.3. Benefits of CRM

Scalability
 Adaptable to Growth: As businesses grow, CRM
systems can scale to accommodate larger volumes of
customer data, more users, and expanded functionality,
ensuring that the system continues to meet business
needs.
 Flexible Configuration: CRM platforms often offer
customizable features and modules, allowing businesses
to adjust the system to fit specific needs as they evolve.

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1.3. Benefits of CRM

Enhanced Customer Insights

 360-Degree Customer View: A CRM provides a
complete view of each customer, including their history,
preferences, and interactions across all touch points.
This helps businesses deliver a more personalized and
targeted experience.
 Behavioral Data: CRM systems track customer
behaviors and interactions, enabling businesses to
predict customer needs, improve customer service, and
fine-tune marketing and sales efforts.

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1.3. Benefits of CRM

Compliance and Security

 Data Security: Many CRM platforms offer robust
security features to protect sensitive customer data,
ensuring compliance with data privacy regulations (such
as GDPR).
 Regulatory Compliance: CRM systems help
businesses manage and store customer information in a
way that ensures compliance with industry regulations
and reduces the risk of data breaches.

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1.3. Benefits of CRM

Reduced Operational Costs

 Efficient Resource Management: By automating
routine tasks and optimizing workflows, CRM systems
can reduce the need for manual labor and resource
allocation, leading to cost savings.
 Improved Customer Retention: Retaining existing
customers is often more cost-effective than acquiring
new ones. CRM systems help businesses build stronger
relationships, reducing churn and the cost of customer
acquisition.

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1.3. Benefits of CRM

Competitive Advantage
 Differentiation Through Customer Experience: By
using CRM systems to offer superior customer service,
personalized experiences, and tailored offers,
businesses can gain a competitive edge in a crowded
market.
 Market Insights: The data and analytics provided by
CRM systems enable businesses to stay ahead of
market trends and anticipate customer needs,
positioning them as industry leaders.

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1.4 Types of CRM

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1.4 Scope of CRM

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1.4 Customer Profitability

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1.4 Trends in CRM

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1.4 Customer interaction & touch
points

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1.5 CRM and Cost-Benefit Analysis

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1.5 CRM and Relationship Marketing

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 Dr. Satish Chinchorkar
[Link]@[Link]
98224 06187
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