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SEMESTER FALL 2013
PRINCIPLES OF MARKETING (MGT301)
ASSIGNMENT NO. 01 (NON GRADED)
DUE DATE: 18TH
TOPIC: Customer Relationship Management
What is CRM?
How CRM helps to retain the existing customers?
Students will learn how to build strong relationships with the customers.
Student will learn how different marketing tools work for effective CRM in services marketing industry to attract new customers and retain the existing customers.
Customer Relationship Management is an important and efficient approach in creating and maintaining relationships with customers. It has been always a very helpful strategy for the management purpose and customer service, which deals with customer concerns and problems. The CRM exists since the concept of buying and selling came into existence. It is a model for the management of a company’s interactions with its current and future customers. Today the role of CRM is very important, marketers, decision makers and professionals are trying to find out more ways to create a relationship with customers (existing or new customers) and for that purpose they use different tactics.
REAL TIME CASE:
Hi-Tec Automatic Car Wash provides automatic car washing facility, is an established brand having a lot of loyal customers through its strong relationship management system. It attained this status by the virtue of its dedicated staff and contacts with the different quarters of the society. Through constant innovation and refinement of the existing strategies aimed at instant solutions, it offers quality services by using high technology to remain in constant and close touch with the customers. It has made the total customer satisfaction possible by providing them a fabulous experience (Quality, Convenience and efficiency). It cares for its employees, customers and the environment and strives to create a positive image of its business in the community. Its goal is to provide total customer satisfaction by providing the best quality service in the minimum possible time.
1 What could be the possible tools to create an effective CRM strategy in order to attract new customers and retain the existing customers? (10 Marks)
2 What role the CRM system can play in the success of a business? (05 Marks)
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What could be the possible tools to create an effective CRM strategy in
order to attract new customers and retain the existing customers? (10
Customer relationship management has never been more important than it is in the era of the social customer. Once people recognized social media's abilities to find old friends and launch comedic parody Twitter accounts, many turned their attention toward digitally connecting with the brands and people that are a part of their real-world identities. The caving in of old walls that used to separate regular people from celebrities, for instance, has made the digital world seem smaller and more under the control of the people. The pressure is now on organizations to constantly reiterate and improve meaningful connections with consumers that increasingly expect more returns for their own investment in brands and products.
Apache Hadoop and business analytics can simplify the process of integrating insights into CRM strategies and improve the efficacy of core customer interactive arenas, like social media handles, call centers and digital marketing. Here are three ways that businesses can invest in better CRM techniques:
1) Promote organizational collaboration
One obstruction that firms may encounter on the road to more meaningful CRM is complications within a business that make improvements hard to start. Siloing and focus on vertical improvement have long been hallmarks of many business operations, which may make for limited interaction between call center operatives, social media mavens and marketing decision-makers, for instance. This can create problems on the CRM end, according to Smart Grid News. In the effort to solve a problem or get a question answered, a customer may address the company on different platforms and interact with people from different departments, so all personnel must be on the same page.
2) Use predictive analytics
Helping customers solve a problem or find what they were looking for can lead to increased loyalty, but predicting problems and offering things they didn't even know they needed can be even better. This is a much more subtle exercise, according to United Business Media, and if done right, the consumer won't often even realize it's happening. Since companies are unlikely to receive the same sort of clear acknowledgement that their initiative is working ("X company fixed my problem" is a more common sentiment than "X business predicted what I wanted based on my prior purchase history"), it's crucial for organizations to use contextual customer data for better analytics. Hadoop Hive can offer context-based customer analysis, like it does for Facebook.
3) Integrate data
Hadoop HDFS provides a better holistic approach to data structuring, which can enable companies to integrate disparate sources of data. This can ensure that interactions with consumers are conducted on a united and well-informed front.
Communicate with customers
Keep customers involved and satisfied at all times.
Regular interaction with your customers will help build trust and loyalty. If your customers believe that you are communicating with them openly, they will feel their relationship with you is one of mutual trust.
Standards of service are constantly improving, so keeping customers satisfied is a continuous process.
Ensure your whole business is focused on meeting customers' needs. Your product or service may be excellent, but the customer experience can be undermined by late delivery, sloppy invoicing or an off-hand employee.
Comply with your legal obligations to keep customers informed.
Under distance-selling rules you are legally obliged to provide customers with certain information about their order including a description of the goods or service, price, cancellation rights and delivery information. You must also make it clear who you are by providing your business name and location, address of your registered office and contact details.
Distance-selling rules also require you to provide customers with an order confirmation.
Under the Consumer Credit Act you must provide consumers with a signed, written agreement detailing the amount and period of credit, cancellation and cooling-off rights, default and early repayment charges and the rate of interest. You must provide at least one statement per year to consumers on a fixed-credit agreement and notices of any amounts in arrears if a consumer misses or falls behind with payments.
CRM - Customer Relationship Management
CRM is the abbreviation for customer relationship management. It entails all aspects of interaction that a company has with its customer, whether it is sales or service-related. CRM is often thought of as a business strategy that enables businesses to:
Understand the customer
Retain customers through better customer experience
Attract new customer
Win new clients and contracts
Decrease customer management costs
CRM (customers Relationship Management)
Customer relationship management has become the new wave of marketing in an attempt to build loyalty, strengthen customer relationships and increase profits. Using software technology and advanced databases, CRM aims to reach out to customers to meet their individual needs and exceed their expectations. Firms implement relationship programs, such as community-building websites and loyalty card programs, to develop a trusting relationship among consumers to gain their confidence and increase repeat purchases. CRM will continue to be a dominant marketing technique that will contribute to ongoing customer relationships and bottom line profits.
Advantages of CRM
Implementing customer relationship management offers a number of advantages and disadvantages to both the companies that initiate the programs and the customers that partake in them. From a customer perspective, the advantages are directly attached to experiences and can mostly be attributed to the perceived benefits of the CRM programs (Holbrook 1996). Customers obtain perceived value from the utilitarian benefits, hedonic benefits, and symbolic benefits offered by the CRM programs. Utilitarian benefits derive from completing a task or obtaining a tangible object, and they often are connected with a product’s physical characteristics. Customers who seek utilitarian benefits from CRM programs are often most concerned with the financial rewards, such as monetary savings from coupons or special offerings. Convenience benefits also provide utilitarian value by saving a customer’s time (Mimouni-Chaabane & Volle 2009). Hedonic value originates from emotionally gratifying or sensory fulfilling benefits that are not connected with tangible product characteristics. For example, customers receive hedonic benefits from CRM programs when they are encouraged to try new products and enjoy new experiences after collecting a predetermined set of loyalty program points or after obtaining a certain customer status (Arnold & Reynolds 2003). Customers may also receive symbolic benefits through self expression, recognition, and approval. These benefits are not related to tangible characteristics or to products; they pertain specifically to an individual’s self-esteem and how they feel they are perceived by the world (Mimouni-Chaabane & Volle 2009). CRM programs provide its customers with symbolic benefits by recognizing individuals and their own unique product preferences and shopping behaviors. When these individuals are considered a part of an elite group of customers or a brand community, they feel socially accepted and satisfied; therefore, CRM programs should focus on giving these customers the experiences they desire (Muniz & O’Guinn 2001).
The advantages of successful CRM implementation from a company perspective involve increasing customer retention, repeat purchases, and customer relationships in order to gain the ultimate objective of raising profits. In a world inundated with marketing tactics and advertising campaigns, companies must redefine themselves in the eyes of the customers, and CRM allows them to do just that. CRM provides companies with a customer knowledge advantage through effective and efficient internal and external information flow and communication (Minocha 2000). The technology created for the CRM process and the focus on customer relationships discover customer leads, encourages loyalty, and generates sales. Once companies create and strengthen those customer relationships, they gain a competitive advantage through customer commitment and trust (Morgan & Hunt 1994); thereby, the companies psychologically connect with customers and capitalize on their purchase behaviors.
The Future of CRM
The future of CRM is bright if companies are willing to invest money and improve their current practices. Currently, CRM implementation is relatively weak among firms; the future of CRM will be determined by how well these firms adapt to its practices. According to Winer, technology and database functions will continue to improve, but companies will have to become more effective in analyzing customer behavior and information (2001). Firms must continue to build company and brand communities to encourage communication and increase loyalty levels among current and potential customers (Reinartz 2006). A popular trend in improving CRM involves the splitting of the marketing manager job into two separate positions. One position would be responsible for customer acquisition and the other for customer retention, allowing for the managers to solely focus on one’s responsibilities and objectives (Winer 2001). Customer experience management (CEM) is another marketing movement that is an offshoot of CRM, and it focuses on the customer experience at every touch point between the firm and the customer. If CEM proves to be a valuable and effective practice, then it is likely that CRM will evolve to include CEM techniques (Schmitt 2003 & Winer 2001).
Customer relationship management has become the new wave of marketing in an attempt to build loyalty, strengthen customer relationships and increase profits. Using software technology and advanced databases, CRM aims to reach out to customers to meet their individual needs and exceed their expectations. Firms implement relationship programs, such as community-building websites and loyalty card programs, to develop a trusting relationship among consumers to gain their confidence and increase repeat purchases. CRM will continue to be a dominant marketing technique that will contribute to ongoing customer relationships and bottom line profits