CRM Process Framework:

A four stage relationship marketing process was developed by Atul Parvathiyar and Jagdish. N. Sheth . The model suggests that relationship marketing process comprises of

Four sub processes:

• Formation Process
• Management and Governance  process
• Performance Evaluation process
• Relationship Evolution or enhancement process.

 The generic model is shown in the figure.

 

Relationship Marketing Process Framework

  

I. Formation Process of Relationship Marketing:

The formation process of relationship marketing involves the decisions that must be made regarding the initiation of relationship marketing activities for a firm with respect to a specific group of customers or an individual customer with whom the customer wishes to engage in a cooperative and collaborative relationship. In the formation process, three important decision areas relate to defining the purpose (objectives) of engaging in relationship marketing, selecting parties (customer partners) for relationship marketing and developing programs (relation activity schemes) for relationship marketing engagement.

II. Management and Governance Process:

Once a relationship marketing program is developed, the program as well as the individual relationship within it must be managed and governed. For mass market customers, the degree to which there is symmetry in the primary responsibility in deciding whether the customer or the program sponsoring company will be managing the relationship values with the size of the market. However, the programs directed at distributors and business customers, the management of the relationship require the involvement of both the parties. The degree to which these governance responsibilities are shared or managed independently depends on the perception of norms of governance processes among rational partners given the nature of their marketing program and the purpose of engaging in the relationship. Not all relationships are managed alike. However, several researchers have suggested appropriate governance norms for different hybrid relationships.

Irrespective of whether relational partners undertake management and governance responsibilities independently or jointly, they must address several issues. These include decisions regarding role specification, communication, and common bonds, planning process, process alignment, employee motivation and monitoring procedures.

III. Performance Evaluation Process:

Companies need to undertake periodic assessment of the results of relationship marketing in order to evaluate whether or not programs are meeting expectations or whether or not they are sustainable in the long run. Performance evaluation is also useful because it allows firms to take corrective areas of relationship governance regarding continuation, modification or termination of relationship marketing programs.

IV. Evolution Process of Relationship Marketing:

Individual relationships and relationship marketing programs are likely to undergo change as they mature. Some evolution paths may be planned, where as others will evolve naturally. In any case, the partners involved have to make several decisions about the evolution of their relationship marketing programs .These include the decisions regarding the continuation, termination, enhancement and modification of  the relationship engagement. Several factors could affect any of these decisions. Among these factors, relationship performance and relationship satisfaction are likely to have the greatest impact in the evolution of relationship marketing programs. When performance is satisfactory, partners would be motivated to continue or enhance their relationship marketing program. When performance does not meet expectations, partners may consider terminating or modifying their relationship. When companies can chart out their relationship, they can engage in relatively systematic relationship marketing programs.

Types of CRM:

There are several different approaches to CRM with different aspects. In general, Customer Service, Campaign Management and Sales Force Automation (SFA) form the core of the system (with SFA being more popular).

1. Operational CRM:

Operation CRM provides support to “Front Office” business processes. For example, Sales Marketing and Service Staff. Interaction with customers is generally stored in customer contact histories and staff can retrieve customer information as necessary. The contact history provides staff members with immediate access to important information on the customer (Product owned prior support calls etc) eliminating the need to individually obtain this information directly from the customer. Reaching the customer at right time at right place is preferable.

Operational CRM processes customer data for a variety of purposes:

• Managing Campaigns
• Enterprise Marketing Automation
• Sales Force Automation
• Sales Management System
• Activity and Time Management
• Quotation and Order Processing
• Delivery and Order Fulfillment
• Tele-marketing and Tele-sales
• Customer Service and Support
• Remote Access

2. Analytical CRM:

Analytical CRM analysis customer data for variety of purposes:

• Designing and Executing targeted marketing campaigns
• Designing and executing campaigns. For example- Customer Acquisition, Cross selling, up selling and add on selling.
• Analyzing customer behaviour in order to make decisions relating to products and services ( eg. Pricing, Product development)
• Managing Information System (eg. Financial Forecasting and Customer Profitability Analysis)
• Customer Segmentation (eg. Age, Sex, Income level)
• Trend Analysis for Customer Satisfaction.

Analytical CRM generally makes heavy use of data mining and other techniques to produce useful results for decision making.

3. Sales Intelligence CRM:

Sales Intelligence CRM is similar to Analytical CRM, but it is intended as a more direct sales tool. Features include alerts sent to sales staff regarding

• Cross selling/ Up selling / Switch selling opportunities
• Customer drift
• Sales Performance
• Customer trends
• Customer margins
• Customer Alignment

4. Campaign Management CRM:

Campaign Management combines elements of operational and Analytical CRM. Campaign Management function includes:

• Target groups formed from the client base according to selected criteria
• Sending Campaign related material (eg. On special offers) to selected recipients using various channels (eg. E-mail, Telephone, SMS, Post)
• Tracking, Storing and analyzing campaign statistics
• Tracking responses and analyzing trends.

5. Collaborative CRM:

Collaborative CRM covers aspects of a company dealing with customers that are handled by various departments with in the company such as sales, technical support and Marketing. Staff Members from different departments can share information collected when interacting with customers. For example, feedback received by Customer support agents can provide other staff members with information on the services and features requested by customers. Collaborative CRM’s ultimate goal is to use information collected by all departments to improve the quality of services provided by the company.

Collaborative CRM processes customer data for variety of purposes:

• Enterprise Portals
• Customer Access
• Supplier Access
• Personalisation

Core CRM Activities:

Survey Management Software:

Survey software automates an enterprise’s electronic surveys, polls, questionnaires and enables to understand customer preference once the customer is categorized, the company can start promotions and pricing accordingly

Sales Force Automation (SFA):

Occurrences of customer contacts are logged in the database. SFA Software can automatically route customers who contact the sales representative. Companies can contact the sales representative forecast the customer’s need based on the customer history and transactions. This initial lead software is called “Lead Management Software”. This software enables to track the transaction from the initial lead to post sale follow up.

Sales Campaign Management:

This software lets a company organize a marketing campaign and compile its results automatically.

Marketing Encyclopedia:

This software serves as a database for promotion of the products. The material can be routed to sales representatives. This can also be shown to the customers on request.

Call Centre Automation:

When customers call a company to get assistance with the continued products, representatives can query a knowledge management database containing information about the product. Some knowledge management software accepts query natural language. If the company must develop a new solution in response to customer query, the information can be added to the knowledge base, which becomes “smarter”.

Business Relationships:

Interaction with other companies and partners such as suppliers/vendors, retail outlets/distributors and industry networks (lobbying groups, trade associations).This external network supports front and back office activities.

CRM is not just a technology but rather a comprehensive, customer centric approach to an organization’s philosophy of dealings with its customers.

Components of CRM

CRM is the combination of policies, processes and strategies implemented by an organization to unify customer interactions and provide a means to track customer information. CRM brings together lots of pieces of information about customers, sales, and marketing effectiveness and market trends. CRM software is used to support these processes, information about customers and customer interactions which can be entered , stored and accessed by employees in different company  departments..

The Generic constituents are

Components of CRM

CA- Customer Acquisition encompasses:

           Counter staff automation

                        Marketing

CR- Customer Retention through:

                        Data warehousing and analytical tools

                        Customer service

                        Call service

                        Contact center

ICV- Improved Customer value through:

                         Marketing automation and campaign management for cross-selling and up-selling

                         Data Warehousing and analytical tools       

CRM includes many aspects which relates directly to one another through :

Front Office Operations:  Direct contact with customers. For  example. Face to Face meeting, Phone calls, emails, Online services etc.

Back Office Operations:  Operations that ultimately affect the activities of the front office (e.g. Billing, maintenance, planning, marketing, advertising, finance, manufacturing etc.)