CUSTOMER RELATIONSHIP

MANAGEMENT

UNIT - 3

PRESENTED BY

K.BALASRI PRASAD
B.Sc(KU), M.B.A(OU), NET(UGC), (Ph.D)(MGU)
ASSISTANT PROFESSOR IN MANAGEMENT

VISHWA VISHWANI GROUP OF INSTITUTIONS

Unit – III: Planning for CRM
Steps in Planning
Building Customer Centricity
Setting CRM Objectives
Defining Data Requirements, Planning Desired
Outputs
Relevant issues while planning the Outputs
Elements of CRM plan
CRM Strategy: The Strategy Development
Process
Customer Strategy Grid
 Steps in Planning for CRM
Identify the best customers, and the worst
Distribute value differently to different
customers
Compete on scope
Focus on strategic capabilities
Win through customer-centric innovation
Measure customer performance
Unlearn and relearn
Redefine the focus
The new competition
 Building Customer Centricity
Client-centric, also known as customer-centric,
is a strategy and a culture of doing business
that focuses on creating the best experience
for the customer, and by doing so builds brand
loyalty.
Client-centric businesses ensure that
the customer is at the center of a business's
philosophy, operations, or ideas.
To successfully implement a customer-centric
strategy and operating model, a company must
have a culture that aligns with them.
To build a customer-centric culture, business
leaders should take six actions:
1. Operationalize customer empathy:
Customer empathy is the ability to identify a
customer’s emotional need, understand the
reasons behind that need, and respond to it
effectively and appropriately.
Customer support specialists are encouraged to
research the people they’re helping and create
mini personas for them to better understand
how the customers are using Slack.
2. Hire for customer orientation: 
 From the very first interaction with prospective employees,
organizations should make thinking about customers and
their needs a clear priority.
 During the interview process, hiring managers are required
to ask every candidate, regardless of role, a question to
gauge their customer orientation.
 This practice not only assesses candidates and ensures
that every new employee is aligned to customer-centric
thinking, but also sends a clear message to everyone
about the importance of customer experience at the
company.
3. Democratize customer insights
 For every employee to adopt a customer-centric mindset, every
employee must understand the organization’s customers.
 And at every all-employee meeting, leaders give an update on
the company’s customer experience delivery.
4. Facilitate direct interaction with customers:
 Companies need to develop ways for employees to interact
with customers directly, even in “back office” functions.
 Every employee impacts the customer experience in some
way, even if indirectly, so every employee can benefit from
interacting with customers to better understand them and learn
about their successes and challenges.
5. Link employee culture to customer outcomes
 The adage “You can’t manage what you don’t measure”
applies to customer centricity, too.
 Managers will be motivated and equipped to cultivate a
customer-centric culture if they know if and how it
impacts results, so organizations should ensure they
establish and track the link between culture and customer
impact.
6. Tie compensation to the customer:
 Organizations should reinforce a customer-centric culture
through their compensation program.
 Only when customer-centric strategies are supported and
advanced by culture will a company realize its customer-
centric vision.
 Setting CRM Objectives
Sales optimization
Retaining established customers
Improving customer satisfaction
Improved data quality and transparency
Marketing optimization
Opening up new target markets
Building a customer database
Increasing competitiveness
 Defining Data Requirements
 Data requirements definition establishes the process used to
identify, prioritize, precisely formulate, and validate the
data needed to achieve business objectives.
 When documenting data requirements, data should be
referenced in business language, reusing approved
standard business terms if available.
 If business terms have not yet been standardized and
approved for the data within scope, the data requirements
process provides the occasion to develop them.
 Organizations are much better served by ensuring that
selection of and specifications for data used to satisfy
business objectives, are prioritized, validated by
stakeholders, and well documented through a repeatable
process.
Data requirements definition should follow an
organized and sequential discovery and
decomposition process.
Data requirements should be represented in the
logical design of the data store and should
reflect standardization across projects.
The data requirements definition process
contributes to the creation and validation of
business terms and definitions, which link to
metadata, data standards, and the business
processes which manage and process the data.
Support Requirements
 How proficient is your staff at picking up new applications and new
concepts?
 Unless they’re all early adapters, you’re probably going to need some
degree of help with on-boarding the product.
 Knowing what level of support your staff will need for your CRM
implementation to succeed long term is important.
Industry &  Market Requirements
 Are you in an industry that collects unique forms of customer data, or one
in which customers negotiate a specific, non-standard path to buying?
 If so, you should pay attention to CRM solutions tailored to your industry.

Feature Requirements
 The traditional way to pick a CRM application was with lists of features
and start comparing different products in a kind of feature shoot-out.
 This is not a recommended approach as all good CRM solutions have the
same basic features.
Financial Requirements
 Company should have several solutions in mind that can
fulfill the business requirement.
 The next step is to decide which of these is most affordable.
 Look for hidden costs; the base cost is almost never the extent
of your expenditures with CRM.
 Knowing the full cost of your CRM solution up front and
projected costs over the life of the software will prevent you
from being over budget.
Vendor Requirements
 Once you have found the right CRM solution and partner,
pause to examine the partners track record.
 Ask whether the CRM implementation was genuinely
transformative, and if so, what role the vendor had to play in
that.
Relevant issues while planning the Outputs
1. Lack of senior management sponsorship
 CRM initiative solely driven by IT team.
 Business users unclear or unconvinced on benefits of CRM.
 Management not willing to commit to enforce CRM adoption.
 Underestimating Change Management demanded by CRM.

2. Expecting too much, too soon 

 Trying to accomplish all CRM objectives in the initial launch.
 Under estimating end-user transition by giving them full-featured, complex CRM
system from get-go.
3. Lack of scope clarity & budget overruns
 Not committing adequate time & budget to requirement discovery.
 Underestimating integration effort.
 Not anticipating quantity & quality of data to be migrated to the
new CRM.
 Underestimating end-user resistance and training costs.
 Underestimating infrastructure costs. Underestimating
customization & implementation costs
4. Underestimating Change Management
 Active resistance due to perceived threat from CRM.
 Passive resistance to adoption due to inertia of changing old
habits.
 CRM interface slow or un-intuitive, making it cumbersome to use.
 CRM viewed as ‘something that benefits management only’
5. Changes in Key Stakeholders in Middle of Project
 Internal CRM champion(s) leaving the organization or having
change of role or department.
 Arrival of new IT Head or Business Head, who has a different vision
for CRM.
 Changes in key personnel from CRM vendor’s side that roll-back the
progress made on vendor’s understanding of organizational objectives
6. Lack of Expertise of the CRM vendor
 Vendor does not have enough experience with the CRM
product being implemented.
 Vendor does not have technology or process maturity of
delivering CRM projects of similar scale.
 Vendor not fully aware of the challenges in CRM
implementation and is ill-prepared to anticipate and deal
with them adequately.
7. Lack of CRM Product Fit
 Product cannot support multiple deployment options, namely – On
Cloud, On-Premise, Private Cloud, etc.
 Product not flexible enough to allow for deeper customizations to
enable fit with organization’s growing and changing needs.
 Product not keeping pace with current CRM trends, such as –
Global, Social, Mobile, etc.
 Product not intuitive or user-friendly, thereby hindering user
adoption.
8. Integration Related Issues
 Lack of adequate support from other vendors of existing
systems that need to be integrated with CRM.
 Data integrity issues and uncertainty over ‘single source of
truth’.
9. Infrastructure Related Issues
 Inadequately sized hardware leading to poor CRM
performance for end users.
 Underestimating the budget for setting up a true High-
Availability, secure CRM setup, leading to cost overruns.
10. Impact on Existing Business Processes
 Considering CRM as just a technology, instead of business
transformation tool.
 Inflexibility to change existing way of doing things, giving
up entrenched (bad) business practices and adopting best
practices that CRM enables.
 Implementation that is overly disruptive of existing
business practices.
 11. Difficulty in deploying a single CRM system spanning
multiple geographic regions due to differences in business
practices and the required localization. 
12. Artificial time pressures created due to end-of-
contract situations with existing vendors. The urgency
and impossible timelines can derail the change management
efforts required for implementation & adoption of new
CRM.
13. Change in business priorities mid way through CRM
implementation, e.g. reallocation of CRM budget, shifted
focus on mergers & acquisitions, changes in regulatory
environment, etc.
14. Complexities in information security due to differing
encryption standards, Government access & control
over data, industrial surveillance in certain regions etc.
 Elements of CRM plan
CRM Comprises of several Components which are essential to the organization. The
components of CRM are:
1. People Management:
 Effective use of people in the right place at the right time is called people
management.
 It is very essential the job roles assigned to the employee are in
accordance to their skills and capabilities.
 At the initial stage, an effective people strategy is adopted and followed by
work force analysis.
 The analysis of work force includes the analysis of their skills and
development.
 Finally, the strategy which would be required for the development and
change is set down and implemented.
2. Lead Management:
 The benefits of lead management are directly available to the sales, call
center and marketing departments.
 The activities involved in lead management relate to market campaign,
making customized forms, mailing lists etc.
 3. Sales force automation:
 Sales force automation (SFA) is a software solution that includes
forecasting, tracking potential customers, interaction with
customers and processing sales.
 It helps in identifying revenue possibilities. SFA includes
opportunity management i.e. supporting sales methodologies and
provide interconnection with other functions to the company.
4. Customer Service:
 Customer service is also an important CRM because CRM focus on
comparison of customer data, gathering information related to
their purchase patterns.
 CRM also provides this information to every department that requires
it. Therefore, sales, marketing and personnel department are able to
gain in their knowledge of the customer. This enables the organization
to provide suitable solution to every customer. Thus, enhances the
retention of customers and their loyalty.
 5. Marketing:
 It involves the promotional activities that are involved in
promoting a product.
 CRM facilitates in increasing the effectiveness of marketing
by studying the potential targeted customers.
6. Work flow automation:
 Work flow process mainly includes the streamlining of process
which ultimately help in reducing cost.
 Work flow automation saves time and energy of several people
doing the same job again and again.
 It relieves work force from unnecessary tasks. It avoid paper
work.
 This process also includes the integration of people and
processes, so that they work in harmony achieving a common
objective.
 7. Business Reporting:
 CRM plays an important role by providing reports on the business.
 Business reporting simply means the ability to identify the exact
position of your company at any given point of time.
 It ensures accurate information. This component of CRM helps in
exporting these reports to different systems and also helps in
comparison of historical data.
8. Analytics:
 The data is studied so that information can be used to study the
market trends.
 Historical and current data help in the creation of charts and
diagrams which ultimately facilitates a complete trend study.
 Analytics is an essential and pivotal part of CRM because it enables
study of data which can be used further to make an estimate of the
business conditions at any given point of time.
 CRM process
CRM process can be defined as any group of action
that is instrumental in the achievement of the
output of an operational system, in accordance
with a specific measure of effectiveness.
CRM is a process of acquiring, retaining and
partnering with selective customers for creating
superior value for the company and the customer.
The need to set up a CRM process may arise
because of the growth in the business or for the
proper management of customers.
The CRM process involves the following five
steps:
Identifying Target Market and Value proposition
↓
Defining Overall Strategy
↓
Deciding on Customer Handling
↓
Selection of a Software for Performance
Management
↓
Re-engage Customers
https://www.cisin.com/coffee-
break/marketing/how-elements-and-process-
of-crm-help-in-growing-business.html
1) Identifying the target market and value proposition:
This is the first step in establishing a CRM process, for
effective results, the target market must be clearly defined.
The definition of target market will depend on
psychographics, demographics tastes and preferences of the
customers. These factors would include age, sex, religion,
interest, and perception of the customers. Efforts should be
made to offer a clear value proposition. A value proposition
is a promise of a value which will be delivered by vendors.
It is specifically targeted towards potential customers. It is
defined and designed to convince customers that a particular
product or service will add more value than competitive set
of products.
 2: Defining The Overall CRM Strategy And Consider Costs.
 This step involves the selection of a customer relationship strategy.
The choice of strategy would be based on the type of customer service
to be offered by the business. It would also include the decision
relating to the type of relationship management that would work better
for the business and the customers. There are various strategies
available for a customer relationship manager. The CRM process can
be co-created with the help of customers. The business can have a
dedicated online CRM community or may also involve the handling of
customers with hands on assistance i.e. the traditional way of dealing
with customers.
 3: The Way Of Handling Each Customer Type Should Be Defined.
 This step involves the manner in which each type of customer is to be
handled throughout the CRM process. This can be done with the help
of customer profiles in priority from step 1 and the customer service
strategies in step 2.
 4. Selection of a CRM Software for The Measurement of
Performance.
 Every organization, whether big or small will install a CRM
SOFTWARE to measure the performance of its strategy. A CRM
software helps in reducing the complexity of the process. Each
software provides a definite solution. The best CRM software
solutions include SAAS (software as a service delivered online), and
innovations in Thai area improve regularly. This ensures that there is
no need of an in-house IT team and server space which would have
been expensive.
5. RE-ENGAGE CUSTOMERS. Customer engagement is a complex
and never-ending task. Customers should be regularly engaged in the
organizations products and services. This will help in creating a
reminder in the minds of customers. Re-engaging of customers
positively in the business is utmost important and yields excellent
results. Following are the three most used forms of customer’s re-
engagement in the CRM PROCESS: -Customer satisfaction surveys
-E-mails. -Social media.
 Important Questions
1. Explain the steps in Planning of CRM?
2. Discuss the relevant issues while planning the
Outputs of CRM implementation?
3. Explain the Strategy Development Process of CRM?