CUSTOMER RELATIONSHIP MANAGEMENT

1
CUSTOMER RELATIONSHIP MANAGEMENT IN INDIAN
TELECOM SECTOR By Dr. A. Patrick Associate
Professor, Badruka College Post Graduate Centre
, Kachiguda, Hyderabad - 27  
2
BUSINESS IS ALL ABOUT CREATING A CUSTOMER,
SATISFYING A CUSTOMER AND RETAINING A CUSTOMER
PETER F. DRUCKER
3
MOVING FROM CUSTOMER SERVICE TO DELIGHT

• 1980S CUSTOMER SERVICE FOCUS ON THE PRODUCT
• 1990S CUSTOMER SATISFACTION NOT CUSTOMER
  EXPECTATION
• Millennium CUSTOMER DELIGHT BEAT CUSTOMER
  EXPECTATIONS
• FUTURE CUSTOMER OBSESSION

4
g o o d s and s e r v i c e s
Goods - things you can touch - tangible Services
- things you cant touch - but you can see their
effect intangible services are not physical,
they are intangible

5
Characteristics of Services
1. Intangibility - u cant touch this 2.
Production (or performing the service) and
Consumption (using the service) - happens at the
same time 3. Heterogeneity - services are not
always delivered the same way 4. Perishability -
cannot be put in inventory or stored for later
use
6
The Services Marketing Triangle
Company (Management)
Internal Marketing
External Marketing
enabling promises
setting promises
Customers
Employees
Interactive Marketing
keeping promises
Source Adapted from Mary Jo Bitner,
Christian Gronroos, and Philip Kotler
7
The Service Profit Chain
Source An exhibit from J. L. Heskett, T. O.
Jones, W. E. Sasser, Jr., and L. A. Schlesinger,
Putting the Service-Profit Chain to Work,
Harvard Business Review, March-April 1994, p. 166.
8
Customers stop doing business with you because

• 1 Die
• 3 move away
• 5 seek alternatives or develop other business
  relationships.
• 9 begin doing business with the competitors
• 14 QUIT for pricing reasons
• 68 are upset with the treatment they have
  received.

9
REASONS FOR POOR SERVICE

• Uncaring employees
• Poor employee training
• Negative attitude of employees toward customers
• Differences in perception between what businesses
  think customers want and what customers actually
  want

10
REASONS FOR POOR SERVICE

• Differences in perception between the product or
  service businesses think they provide and what
  customers think they receive.
• Differences in perception between the way
  businesses think customers want to be treated and
  the way customers really want to be treated, or
  are actually treated.

11
Imminent Issues

• Fierce competition is requiring more and more
  innovations to differentiate firms from one
  another.
• With technology available to everyone today, the
  traditional features and cost advantages are no
  longer relevant.
• Emergence of VIGILANTE CUSTOMER, a new
  generation of super consumers who are smart,
  discriminating and vocal.

12
Most Imminent Issue

• Customer churn in telecom industry
• In the telecommunications industry, churn is the
  term used to describe customer attrition or loss.
  There are different types of churn such as
  voluntary, involuntary and internal. Churn is
  measured in telecom industry in different ways.
  Typically it is calculated by dividing
  disconnects by the net subscriber base.

13
Most Imminent Issue

• High cost of customer acquisition and customer
  education require companies to make large upfront
  investments in customers. Customer retention,
  therefore, is becoming critical to customer
  profitability.
• However, with easy access to information and a
  wide range of offerings, it has become easier for
  customers to switch between service providers -
  be it in the area of credit cards, mortgages,
  telecom or insurance.

14
SERVICE COMPANIES FACE THREE TASKS

• INCREASING COMPETITIVE DIFFRENTIATION
• SERVICE QUALITY
• PRODUCTIVITY

15
DELIGHTED
C U S T O M E R EX P E R I ENC E
SATISFIED
LEGEND
DISSATISFIED
IRRITATED
NIGHTMARES
ANGRY
S E R V I C E P E R F O R M A N C E
16
CUSTOMER SERVICE FACTS

• Technical Assistance Research Program (TARP)
• It costs six times more to attract a new customer
  than it does to keep an old one.
• A typical dissatisfied customer will tell 8-10
  people about their problem.
• Seven of ten complaining customers will do
  business with you again if you resolve the
  complaint in their favour.

17
CUSTOMER SERVICE FACTS

• If a customer complaint was handled well, 95 of
  the customers will return to do business with
  your organisation.
• Of those customers who quit, 68 do so because of
  an attitude of indifference by the company of a
  specific individual.
• Word-of-mouth has a significant influence on
  consumer decisionstwice as much as advertising
  General Electric (GE) Survey.
• Dissatisfied customers will complain to 10 to 20
  friends and acquaintances three times more than
  those with good experience.

18
What is CRM?

• CRM stands for Customer Relationship Management.
  It is a strategy used to learn more about
  customers' needs and behaviors in order to
  develop stronger relationships with them. After
  all, good customer relationships are at the heart
  of business success. There are many technological
  components to CRM, but thinking about CRM in
  primarily technological terms is a mistake.

19
CRM IS NOT A PROJECT NOR A ONE TIME ACTIVITY IT
IS A ONGOING PROCESS. IT IS A BUSINESS STRATEGY
TO UNDERSTAND, ANTICIPATE AND MANAGE THE NEEDS OF
THE PRESENT AND POTENTIAL CUSTOMERS.
20
What is the goal of CRM ?

• Build long term and profitable relationships with
  chosen customers
• Get closer to those customers at every point of
  contact with them.

21
(No Transcript)
22
(No Transcript)
23
(No Transcript)
24

• TYPES OF CRM
• WIN BACK OR SAVE
• PROSPECTING
• LOYALTY
• CROSS SELL / UP SELL

25
The Customer Lifecycle
26
The Customer Lifecycle
ACQUISITION
SATISFACTION
DISSATISFATION
RETENTION
LOYALTY
ATTRITION
DEFECTION
RE- ACQUSIATION
27

• CUSTOMER ACQUISITION INPUTS
• SUSPECTS
• ENQUIRERS
• LAPSED CUSTOMERS
• FORMER CUSTOMERS
• COMPETITORS ENQUIRERS
• COMPETITORS LAPSED CUSTOMERS
• COMPETITORS FORMER CUSTOMERS
• REFFERALS
• EXISTING CUSTOMERS

28
LOYALTY PROFITABILITY MATRIX
P O T E N T I A L P R O F I T A B I L I T Y
BUTTERFLIES
TRUE - FREINDS
HIGH
STRANGERS
BARNACLES
LOW
LOW
HIGH
POTENTIAL LOYALTY
29
STEPS IN INDIVIDUAL BUYER BEHAVIOUR NEED
RECOGNITION INFORMATION SEARCH EVALUATION OF
ALTERNATIVES PURCHASE DECISION POST PURCHASE
EVALUATION(COGNITIVE DISSONANCE OR SATISFACTION)
30
INDIVIDUAL CUSTOMER BUYING SITUATIONS
D I F F E R E N C E S B E T W E E N
B R A N D S
COMPLEX BUYING BEHAVIOUR
VARIETY SEEKING BEHAVIOUR
HIGH
HABITUAL BUYER BEHAVIOUR
DISSONANCEREDUCING BEHAVIOUR
LOW
LOW
HIGH
LEVEL OF INVOLVEMENT
31
CUSTOMER LOYALTY LADDER
CUSTOMERS BY LOYALTY
CUSTOMERS BY INSISTENCE
CUSTOMERS BY REPEATATION
CUSTOMERS BY CHOICE
CUSTOMERS BY OCCASSION
CUSTOMERS BY CHANCE
32
CRM PHASES
ASSESSING
PLANNING
EXECUTION
33

• ESSENTIALS OF CRM IMPLEMENTATION
• STRATEGY(SEGMENTATION, PRICING, CHANNEL,
  ADVERTISING, BRANDING)
• SEGMENTATION
• TECHNOLOGY
• PROCESSESS
• ORGANIZATION

34
Benefits of Customer Retention

• SAVINGS ON CUSTOMER ACQUISITION OR REPLACEMENT
  COSTS
• A GUARANTEE OF BASE PROFITS AS EXISTING CUSTOMERS
  ARE LIKELY TO HAVE A MINIMUM SPEND PER PERIOD
• GROWTH IN PER CUSTOMER REVENUE OVER TIME
• A REDUCTION IN RELATIVE OPERATING COSTS AS FIRMS
  CAN SPREAD THE COST OVER MANY MORE CUSTOMERS AND
  OVER A LONGER PERIOD
• FREE OF CHARGE REFERRALS OF NEW CUSTOMERS FROM
  EXISTING CUSTOMERS
• PRICE PREMIUMS AS CURRENT CUSTOMERS USUALLY DO
  NOT WAIT FOR PROMOTIONS OR PRICE REDUCTIONS
  BEFORE THEY MAKE THEIR PURCHASE.
• CERTAIN NON-ECONOMIC BENEFITS FROM CUSTOMER
  RETENTION ARE INCREASED CUSTOMER TRUST,
  COMMITMENT AND COOPERATION

35
What are customers looking for?

• Staff friendliness
• Staff knowledge
• Efficiency of service
• Reliability
• Responsiveness
• Professionalism
• Value for money
• Accessibility
• Product range Appeal
• Outlet environment.
• PROPER MANAGEMENT OF FUD BY THE SERVICE PROVIDERS
  (FEAR, UNCERTAINITY, DOUBTS)

36

• The four Rs of Relationship marketing as per
  James G. Barnes are
• Relationships
• Retention
• Referrals
• Recovery

37
Building Customer
Relationships
Leads to
Retention
Producing
Referrals
And easier
Recovery
38
INTENTION Of a unique relationship
INTERACTION With customers
INTEGRATION Of customers
INFORMATION About customers
INVESTMENTS In customers
INDIVIDUALITY For customers.
The 6is of Relationship marketing By Diller
39
Thank you one All!