CRM STRATEGY AND PLANNING

Ateeque Shaikh, IIM Jammu

Class reading
 Case mentioned in the case?
 Sectors in which they are operating? B2B OR B2C?
 Implementation approach – Pilot / Enterprise wide?
 Is the CRM implementation strategic?
 What problem / pain point they are trying to solve?
 Vision
 Stage of the journey
 Impact / result
CRM Perspectives
CRM at the CRM at the CRM at the
Functional Customer-Facing Company-Wide
Level Level Level

▪ Set of processes ▪ Set of activities ▪ Strategic

to execute that provide a Orientation to
marketing functions single-view of the implement customer
like sales force customer across all centricity within the
automation or contact channels entire organization
marketing campaign ▪ Customer and create
management intelligence shareholder value
obtained is
available across all
customer-facing
functions
An organizing framework CRM design
Industry factor Organizational factor CRM performance

• Degree of customer • Top management • Customer behaviour

heterogeneity (cost to orientation • Customer attitude
serve) • Integration of • Learning about the
• Level of interaction organizational processes customer
• Directness of contact • Technology alignment and • Profitability
• Type and frequency of information capture • Product and service
category purchase • Implementation adjustment
• Nature of product • Analytical / Operational
An organizing framework for CRM design
Campaign
/
Acquisition
Communit Lead
y Building conversion

Referral CRM: Personaliz

program Satisfaction ation

Frequency Customer
/ Loyalty Service /
programs Cross-Sell
/ Rewards
Retention
program
Organizing framework for CRM
• Campaigns • Assign leads
• Generate • Qualify leads
leads • Convert leads
• Database • Track
opportunities

Marketing Sales

Service /
Metrics Order
Delivery
• Service
• Customer Satisfaction Quality
• Loyalty • Service
• Outcomes of Various CRM Delivery
Programs
The CRM design: Integrated CRM Approach
 Planning for CRM: Key Questions to ask

 What is the firm’s vision for its relationships with all stakeholders, in addition
to key customers?
 Define the existing customer relationship management processes within the
organization
 Quantify the inefficiencies of the current situation – what are the
financial costs of the status quo? (IT support time, report compilation
time, lost revenue)
 What new capabilities does the organization need to achieve the vision and
goals of relationship management?
 What roles must management take to implement the vision?
 What measurements must be used to assess relationship management
outcomes?
 How should all stakeholders be aligned to create the value end-customers
want?
 Gartner framework : CRM Strategy and planning

1. Vision • Creating a picture of what the customer centric enterprise will look like

• Developing a strategy to turn the customer base into an asset

2. Strategy • Setting objectives and determining how resources will be used

3. Valued Customer Experience • ensuring that the enterprise’s offerings and interactions deliver ongoing value to customers,.

• changing cultures, organizational structures and behaviors to ensure that employees,

4. Organizational Collaboration partners and suppliers work together to deliver customer value

• customer life cycle processes (for example, welcoming new customers, handling inquiries and
5. Processes complaints, and winning back lost customers),

6. Information • collecting the right data and routing it to the right place.

• managing data and information, customer-facing applications, IT infrastructure and

7. Technology & implementation architecture.

• measuring internal and external indications of CRM success and failure

8. Metrics
CRM vision statements
 Answers – How the customer centric organization will look like?
 Sample vision statements – Single statement with objectives
 Rabobank with over 10 million business and private customers and 6500
employees found it difficult to interact and understand their customers
 CRM vision – enable better customer understanding, identifying individual customer
requirements, and selling appropriate products and services
 Objectives – easy access to customer data, enabling online transactions through
multiple channels, single view of customers
 Vision statement Understand customer better than anyone else and use our
strengths to deliver unbeatable value to our customers
 Objective may also include - Customer profitability, Behavior prediction and
segmentation, Personalization
CRM vision statements
 “Build and develop long-term client relationships by creating
personalised experiences across all touch-points, and by anticipating
customer needs and providing customised offers.”
 “Engage our clients by personalising their journey with us alongside
effective retention strategies as well as efficiently responding to leads to
generate new client wins.”
 “Create a hub for a complete, uniform and robust view of our
interactions to ensure that our staff have the correct information at their
fingertips when dealing with customers and prospects.”
 Steps in Developing a CRM Strategy – Refer Bancaja
case

Aligned Organizational vision and mission with

• Strategy - Operational excellence / Product leadership (Differentiation) / Customer
Intimacy
• CRM Vision
• People
• Process
• Technology
Gain enterprise- Analyze
Build a CRM Define the CRM
wide business
project team strategy
commitment requirements
Step One: Gain Enterprise-wide Commitment
Budget
allocation
for the
solution
Bottom-up
buy-in from
Top down system users
management
commitment

Dedicated
full-time
project team

Enterprise-wide
Commitment
Step Two: Build a CRM Project Team

Obtain active representation from:

Management - Provide leadership, motivation and supervision

IT/ technical personnel – Compare current and envisioned information system, ensure that CRM
system is compatible with existing software applications

Sales, marketing and services groups - Evaluate usability of CRM system based on
effectiveness, efficiency and satisfaction

Financial staff - Provide critical analysis for assessment of increased sales productivity,
evaluation of operating costs, estimated cost of system expansion and ROI projections

External CRM expert - Provide a valuable source of objective information and feedback
 Step Three: Analysis of Business
Requirements
Gathering information to:

1. Identify the services and products that are being supported

2. Map current workflows, interfaces, and interdependencies

3. Review existing technologies, features and capabilities
4. Discuss the vision for the business and the operational plan

5. Define business requirements

6. Develop enhanced business workflows and processes
7. Identify gaps in technology functionality

8. Map functionality to business processes

9. Develop a new technology and functionality framework

10. Develop a conceptual design and prototype plan

 Step Four: Define the CRM Strategy
Value Proposition

Business Case

A defined CRM strategy Customer Strategy

Enterprise Transformation
Plan

Management of other
Stakeholders

Characteristics of a defined CRM strategy

CRM Strategy - CRM objectives
Other common CRM objectives
 Optimize revenue
 Profitability
 Developing customer Loyalty

 MVC’s most valuable customers

 CLV – customer lifetime value
 Shared customer knowledge
 Customer 360 view (video)
 Process Improvement
Strategy in practice: Retail CRM strategy
 Customer lifecycle stage – Development
 Objective – Cross-sell / repeat sell
 Strategy – Personalized Email Alerts
 Online floral retail delivery
 Reminders for special events for sending flower
 Value-added content in the form of a blog covering a wide range of
topics and a “Florapedia®” of floral facts and gift suggestions.

 https://www.proflowers.com/account/reminders
Strategy in practice: Retail CRM strategy
 Customer lifecycle stage – Prospect – visited your website
 Object repeat visit and purchase
 Pet education center on its website
 New Pet Guides, shopping checklists, articles, videos, coupons, a pet-
selfie section

 https://www.petco.com/shop/en/petcostore/c/new-puppy-guide
Strategies for selecting and organizing customers
Principles of Customer Relationship Management (CRM)
 3.0 Valued customer experience
 Omni-channel customer
experience – consistent
experience, anywhere, anytime
 Customer experience measures
– customer and employee
feedback
 How much does the customer
value the enterprise?
 How much does the enterprise
value the customer?
4.0 Organizational Collaboration
 The “Operations Department” cooperates closely with the “Marketing
and Analysis” department in the new product introduction process

 Information on customers used to craft strategy is obtained from the

front-end people

 Information from “Operations” is used to Cross-Sell Business

5. Processes

 Removing the pain points along the Journey

 Customer life cycle processes (for example, welcoming new
customers, handling inquiries and complaints, and winning back lost
customers),
6.0 Information and data collection
 Bring together in one place a view of all contacts, transaction, accounts and
interactions with each customer
 Address, Age and
 All contacts the customer had at any company location, phone center , or Internet
site
 What products the customer held at the time of the call
 What products the customer was targeted / approved for by sales and marketing
 How the customer responded to targeted direct marketing campaigns
 Sector specific data
 Banking - account balances / number of products held
 Real estate
 Airline – frequent flyer
Developing CRM program – Information & data
 To start with ask these questions?
 How many customers do you have?
 Disaggregate them product wise

 Gender

 Age

 Education level

 Household
Developing CRM program
 What are the different customer segments?
 Which customers the organization / bank / Telecom / Insurance / Auto
likely to lose / reduction in patronage (Retail / Hospitality /Airline) ?
 Who is more likely to respond to a given offer?
 Who is likely to Churn?
 Who is likely to be retained?
Descriptive analytics – Understand customer profile
of your Bank / Branch
# Name Gender Area Age Transactions Profitability
per month
1201 Satish M Kondhwa 24 9 1200
1202 Vishal M Kondhwa 32 3 400
1203 Rameez M Hadapsar 21 8 9000
1204 John M Kondhwa 53 1 500
1205 Aruna F Kondhwa 23 6 650

 Most of my customer are from (location)?

 Most of my customers are (Gender)?
 Average transactions per month of my customer is?
 Profitability of my customer is
 What is the range of customers I deal with in terms of
Age?
 Identifying the most valuable accounts
What is your relationship management program?

 Do you reach out and initiate contacts with your customers?

 How many customers you meet personally ?
 How many customer you interacted over phone?
 Do you know who is your profitable customers? (ARPU – Airtel)
 D you know who is your unprofitable customers?
 Do you who is your no-profit no-loss (Break Even) customer?
7.0 CRM Technology and implementation

Strategy /
goals

Analytic System/
Intelligence Infrastructure
What CRM promised
 To allow companies to respond efficiently, and at times instantly,
 to shifting customer desires, thereby bolstering revenues
 and retention while reducing marketing costs
 But it failed miserably initially
Some successful case studies
 CRM done right reading -
Some successful CRM path – session reading
CRM Implementation Matrix
Customer

Acquisition Growth and Decline and Exit

Stage Retention Stage Stage

Business Operational
Organization CRM

Analytical CRM

Collaborative
CRM
Implementation Projects

Operational Analytics Collaborative

CRM CRM CRM

Interaction Channel
Management Management
CRM Implementation: Simple rule
 What CRM can do ? A comprehensive CRM system can automate every
aspect of company’s relationship with its customers, from all the activities
needed to target customers through those for product development, sales,
service, and retention
 CRM projects which are relatively narrow in scope and modest in their goals
 Don’t go full throttle
 Don’t use CRM for transforming entire business
 Identify pain points
 Solving clearly defined problems within their customer relationship life cycle
CUSTOMER RELATIONSHIP
MANAGEMENT

Ateeque Shaikh
Introduction
Course Overview
 Course outline
 Textbook
Assignment
 Guidelines – word document
 Approach your internship organization whether you can design CRM for the
organization
 Real estate
 Airline
 Banks
 Telecom
 Hospitality
 Insurance
 Automobile
 Retail
 Look for online “RFPs for CRM”
 The structure of the report
Your idea of relationships?
 Common attributes of relationships?

 What is the antithesis of relationships?

Transaction vs Relationship Marketing

Transaction Relationship

 One off exchange  Ongoing exchange

 Short term  Long term
 Mass communication  Personalized communication
 Profitability of transaction  Life time value
 Mass market  One to one

Do you remember Craftsvilla?

What is CRM?
 Establishment (Marketing), development (Sales& cross-sell), maintenance
(Service, churn, retention) and optimization (Profitability & lifetime value) of
long-term mutually valuable relationships between consumers and the
organizations.
 Focuses on understanding the needs and desires of the customers
 Achieved by placing these needs at the heart of the business by integrating
them with
 Organization's strategy, people, technology and business processes.
 Kirana stores / Clothes Shop in Market Town / (Show Iim Jammu
spreadsheet)
 How do they manage their relationship with their customers?
 Do they have technology?
 Can CRM be practiced without technology?
Definitions
 “Relationship management is putting the customer in the middle of the
business circle.” Lee
 An approach that is associated with understanding customer
requirements, delivering customized products to them, and resolving
their product related issues on time.
 The main aim of relationship management is to achieve a high
level of customer satisfaction, which, in turn, increases the
profitability of an organization.
Traditional CRM

 Sales representatives driving dusty roads to visit customers while

keeping hand written diaries of customer names and their
requirements – What is the alternative? Mobile CRM – Salesforce?
 Focus on customer acquisition but not so much on customer retention
 The local Kirana stores would know the intimate details of the customer
 Your local Pharmacies offering additional 5% discount on MRPs
The need for CRM system

 Earlier service providers use to have close relationships with customers

 Identifying what customer wants, customized services through personal interaction
 Banks, Telecom, Insurance, retail – almost all the transactions are happening
remotely – No opportunity to interact with them
 Imagine 200 customers, you know them personally or maintain data on a
spreadsheet. In such cases, you really don’t need a CRM System.
 What if you are State Bank of India with 40 Crore customers?
 Airtel?
 Generate 25000 leads? Run 100s of Advertising campaigns? How to manage this
efficiently – Campaign Management module
 Sales module
 Is customer relationship management a new concept ?
 However, the way we manage the relationship has changed
Practice definitions
 According to Gartner (2004), “A business strategy designed to optimize
profitability, revenue and customer satisfaction around customer segments,
fostering customer centric behaviors and implementing customer centric
processes.”
 Business strategy that enables organizations to better serve the needs of
their customers.
 It encompasses a number of technologies used to streamline customer
interaction, which helps in finding, acquiring, and retaining customers.
 Note the definition doesn’t mention technology / software in its definition
 Number of CRM implementation failed because they assumed CRM
implementation implies purchasing CRM software
Emerging definition of CRM

customer-centric business strategy aimed to create superior

value for the organization and the customer based on the
relationship marketing approach

“.. a combination of business process and technology that seeks

to understand a company’s customers from the perspective of
who they are, what they do, and what they are like”.

aligns product and sales strategies with customer requirements

and preferences
The Impact of CRM on Organizations

Shifting the focus from Streamlining the offer

the product to the to what the customer
customer requires, not what the
organization can offer
Global CRM Market
 Gartner - The global market - customer experience and relationship
management (CRM) software market - $48.2 billion (2018)
 Enterprise application software - $193.6 billion (CRM makes up 25% of this
market)
 Early adopters – Financial services, retail, telecom, hospitality and automotive
 Dominant CRM Modules (60 to 70% market) / Requirements RFP for CRM
solution Implementation.pdf
 Marketing CRM
 Sales CRM
 Customer Service and support
 Creating personalized relationships
The need for CRM: Are Customers Really that
Important?
 A recent study on the cellular phone industry showed that for every 1
% of customers lost, the company looses an average of $500,000
 A typical $1 billion business could add $40 million in profit by
enhancing CRM capabilities by 10%
 Easier for customers to switch companies if they are not happy with the
service they receive. One of the primary goals of CRM is to retain
clients.
 Earlier opening a bank account was like marrying to the bank
Need for CRM

Changing Simplifying Offering

Environment: Marketing Rising customer customized
technology & process expectations services
competition

Operational Existing customers Cost of acquiring Customer

efficiency & are more new customers is retention by
Reducing costs profitable high cross-selling and
service
Enablers of CRM
 Emergence of Service economy
 What is so special about Services as compared to product markets?
 Simultaneous production and consumption of services. These two things
cannot be separated
 US – Service sector approximately contributes 75% to GNP and
employs 80% of the people
 Europe, Canada, Japan – 60-70%
 India – 48%, China 33%
Criticality of building relationships

 Entry of Non-traditional competitors

 Reliance foray into telecom
 Substitute Technology
 Mobile camera phones almost substituted the need for camera
 Supplier as a competitor
 Forward integration – product companies entering into retailing
 Customer as a competitor
 Wal Mart, Future and Amazon – private labels
 Misalignment between revenue and profit
 Customer profitability and lifetime value
Barriers to Implementation

Legacy
problems

Don’t know
what to do Barriers to Employee
with CRM
system
Implementation resistance

Data
Quality
isssues
Evolution of CRM
 Stage I: Refers to the first stage where, CRM is used as a functional
approach and involves only two aspects, namely
 Sales Force Automation (SFA) – maintaining customer data and generating leads
 Customer Service and Support (CSS) – contact centers / service queries and
complaint handling.
 Stage II: Refers to the second generation of CRM. In this stage, CRM
was used to support front-office activities and fulfill the requirements
of customers.
 Stage III: Refers to the third generation of CRM. In this stage,
organizations realized the need of integrating front-office CRM
systems with back-office CRM systems.
Benefits of CRM
 Effective communication channels – Touch /channel management
module
 Gathering information related to customers – Datawarehousing
 Creating detailed profiles of individual customers – customer 360
degree view
 Tracking new sales opportunities – Sales module
 Fulfilling customer requirements on the go – anytime, anywhere
Benefits of CRM
 Customers are profitable over a period of time
 Bank customer – cost of acquisition, cost of servicing, customers share of wallet
 1 Increase in sales to existing customers increases profits by 17 percent
 Companies can boost profits up to 85% by increasing its annual retention by only 5%
 Customer profitability is skewed
 Top 20% of the customers contribute 80% of the profits – Implication of the skew
 Marketing benefits of CRM
 Need for carrying out survey is reduced, collection of buying and consumption data is an
ongoing process, helps marketers develop customer centric products
 Reduce wasteful expenditure of promotions
 Case
 Alternative approach – use data mining, filters and event triggers to shortlist possibly
1000 customers, make a pitch through email, direct contact, reinforce on social media and
get 90 conversion at a rate of 9% conversion
Types of CRM
Types of CRM

Operational CRM Analytical CRM Sales Intelligence CRM

Contact centers – contact Descriptive analytics, More relevant for

history, conduct cross-sell predictive and product markets –
campaigns, Marketing prescriptive modelling Distributors, retailers-
automation for acquisition, cross-sell, track sales, productivity
churn and retention
Delivery of service is at the heart of CRM

Customer
Loyalty
Service Customer
Quality Satisfaction Brand
advocates
 How do you measure these?
 Are organization measuring these? Trust
Measuring customer experience – How your CRM is
performing?
 Customer Satisfaction
 Net promoter score
 Customer effort score
Customer experience – touch point
Customer lifecycle
Reach

Advocacy Acquire

Loyalty Conversion

Retentio Develop
n nurture
Measures of success for CRM
 Successful customer initiatives often include one or more of the
following characteristics
 Ongoing repeat purchase relationships
 they are affordable,

 they help companies generate Return on Investment (ROI) through higher

profit margins,
 they produce greater wallet share,

 they improve operational and administrative efficiency

 Thank you
Types of CRM
Types of CRM

Operational CRM Analytical CRM Collaborative CRM

Streamlines Marketing Seamless integration of

Sales and service Descriptive analytics, Marketing, Sales and
operations predictive and service function with the
Contact centers – contact prescriptive modelling for help of data.
history, conduct cross-sell acquisition, cross-sell,
campaigns, Marketing churn and retention Omni-channel
automation management
Evolution of CRM
Evolution and Growth of CRM
Integration of front-end customers with back-end systems

CRM
Service and
ERP Support

Distribution Order
Finance

Processing Customer
Manufacturing
Sales
R&D
Marketing
UNDERSTANDING CONSUMER
JOURNEYS FOR CRM

Ateeque Shaikh
Customer lifecycle
Awaren
ess

Advocacy considerati
on

Loyalty Conversion

Retentio Develop
n nurture
Omni-channel case
 Visualize Sara’s consumer journey
What do you think - will physical stores / Bank
branches disappear?
People prefer branches for
new accounts, problem solving
and guidance. Which channel do you prefer to use for …
90% People prefer
digital for routine
80% transactions and
Ad Hoc transactions Day-to-Day/frequent transactions
70% information.
60%
% of respondents

50%
40%
Branch
30%
Online
20%
10%
0%

Source: Gallup, May 2013

Background: Why are we discussing the changed
role of physical stores?
 The development of new communication and information technologies
 Change in the way customer interacts with business
 Unlike traditional customers, the new generation
 doesn’t like time barriers,
 they won’t stand in lines,
 and they don’t take a minute to shift over to a different organization that
offers them the comfort they desire.
 Therefore service providers are turning into multi channel
organizations
 Success depends on understanding multi-channel customer behaviours
Multi-channel organizations
 Multi-channel – providing different alternative channels to customers
 Banks - Typically include branch, ATMs, call center, internet banking
and – increasingly – mobile
 Telecom / Retail - Mobile apps, Internet, social media, physical store,
Self service counters
Multi-channel customer management
 Multichannel customer management is the design, deployment,
coordination, and evaluation of channels through which firms and
customers interact, with the goal of enhancing customer value through
effective customer acquisition, retention, and development.
 The different touch points of customer?
 Multiple touch points fuelling
changes in customer behaviour
 Customer switch in between
channels
 More customers regularly use a
combination of channels
 whatever channel the customers
use, they expect consistent
experience
The future: moving from multichannel to omnichannel
experience
 Multi-channel customers can choose their preferred means of dealing
with the organization but each channel functions independently from
the others.

 What is omni-channel experience

 In omni-channel experience, customers can still choose which channels
they use to engage with their service provider but the channels are
integrated so that the customer experience is seamless across them all.
 Give your customer Omni-Channel experience: Any
time, Any place
 Omni channel video

 Seamless experience across channels

 Right channel for the right transaction
 Consistent experience across channels
How to find opportunities for omni-channel
experience: Understand consumer journey –
 Consumers
home loan
journey
Personalised Demonstrators and
Online journey offers
click, call and visit to
Click for Appointment
offers rich information
experience if tools support sale and  Consumers
customer’s mobile build personalised
open account options. about local branch.
device identified. illustration Insurance
Digital branch experience product
Web
journey
Branch: Person Search Comparison
Click for  Imagine this
Appointment
Branch: co-browse
Meets branch Instant fulfillment
through digital printing
journey for
staff
in-branch. other sectors
Branch display Uses tools and
product
Arrives at branch Digital signage demonstrators
Mobile
information and
Text/email signing contract
Phone
reminder

Paper
Messaging includes
Option to enrol mobile Selects
start contribution of local
device as ID key for Product
branch to local
branch visits.
community.
Consumer journey – ecommerce -
 JIPMAT google analytics
Another way to visualize consumer journey
Another way to visualize consumer journey
Why understanding multi channel customers is
important
Higher
revenues

Higher
share of
wallet

Past
customer
value

Likelihood
to
continue
 Multi channel customers buy more products –
Well Fargo
3.3
propensity (relative scale)

2.9
Product purchase

2.4

1.8

1 Channel 2 Channels 3 Channels 4 Channels

Number of channels used by customer in previous 6 months

 Wells Fargo on an average sells 6 products to one customer

 Find out customers using more than 4/3 channels and having only one product from your Branch
SOURCE: Wells Fargo Bank, Investor Report, 2013,
www08.wellsfargomedia.com/downloads/pdf/invest_relations/presents/morgan_061113.pdf
Cost per transaction

Bank Branch – Rs. 50

Salesperson – Rs. 30

Telephone Calling – Rs. 22

ATMs – Rs. 18

Internet – Rs. 10

Mobile – Rs. 2-3

Relationship marketing / customer relationship
management
 To practice CRM, we should first understand what kind of relationship
the customers has with the business
 The customer is using multiple channels to interact with the business
 One channel doesn’t know what experience the customer has gone through in
the other channel
 Therefore it is important to understand multi-channel customer behaviour
The success of multi-channel customer strategy hinges
upon
❑ Understanding your customers behaviour
❑ Who are your multi-channel customers
❑ whom to target for channel migration

 Watching costs
 As the alternative channels are added, number of transactions
increases
How do you define multi-channel customers?
 about 69% of SBI’s transactions are done via the bank’s alternative
channels, which include the automated teller machines (ATMs), Internet
and mobile banking.
 85% of the HDFC Bank transactions happen through non-branch
channels
 Find out this number for other sectors?
 Multi-channel customers are those who make a purchase in more than
one channel in the observed time period.
How do you define multi-channel customers?
 Does it take into account different degrees of channel behaviour?
 Can we have a more refined definition of as to who are multi-channel
customers?
 Branch only customers ? Single channel customers
 Branch + ATM ? Multichannel customer
 Branch + ATM + Internet Banking? Multichannel customer
 Branch + ATM + Internet + Mobile Banking? Multichannel customer
Understand the larger picture of your bank
 How many customers do you have ? Branch / Region / Zone / overall Bank
 How many customers have not visited a branch in the last month?
 How many customers have not visited a branch in the last 6 months?
 How many customers would rather visit their branch as little as possible?

 Midland Bank (now part of HSBC) did research before establishing their
telephone banking operation First Direct
 they found some surprising results:
 one in five customers had not visited a branch in the last month,
 one in ten not in the last 6 months,
 one-half (51 per cent) said they would rather visit their branch as little as possible
 48 per cent had never met their bank manager
 Understand the larger picture
Type of channel Number of transactions per Percentage of transaction for
month for each channel each channel

Branch
ATMs
Internet Banking
Mobile Banking
Telebanking
wallet
Average transactions per
month or per year
 Case example
Type of channel Number of transactions per Percentage of transaction for
month for each channel each channel

Branch 20,000 20%

ATMs 40,000 40%
Internet Banking 30,000 30%
Mobile Banking 5000 5%
Telebanking 2000 2%
wallet 3000 3%
Average transactions per 1,00,000 100%
month or per year
 Number and proportion of transactions

Number of Percentage
customers
Just Branch

Branch ATM

Branch ATM Internet

Banking
Branch ATM Internet Mobile
Banking Banking
Branch ATM Internet Mobile wallet
Banking Banking
Branch ATM Internet Mobile Telebanking
Banking Banking
 Number and proportion of transactions – 10,000
customers
Number of Percentage
customers
Just Branch 2000 20%

Branch ATM 6000 60%

Branch ATM Internet 8000 80%

Banking
Branch ATM Internet Mobile 9000 90%
Banking Banking
Branch ATM Internet Mobile wallet 9500 95%
Banking Banking
Branch ATM Internet Mobile Wallet + 10000 100%
Banking Banking Telebanking
What determines channel choice: Socio demographic
characteristics
 Young people (between the ages of 18 and 35) - Open to new
technology
 Older consumers need for personal interaction and lack of trust in
Technology
 Steady employment
 High income/education target markets have a higher demand for
technology-intensive channels
 Innovation adopters
 Time constrained
What determines consumer channel choice
 Financial products differ in terms of product purchase, customer involvement
levels and
 low-involvement financial services – routine banking procedures
 High involvement products – home loan or financial investments
 Systems / Technology
 Ease of use
 perceived risk
 Understand the customers need for convenience and interaction visuals\Need for
interaction.mp4
 Therefore, customers needing to carry out a large number of low-involvement
transactions
 have more channels available to them
 What channel(s) did the customer use for which purpose, and what did he or she
purchase?
 Transaction need and channel choice – map this for
other sectors
Transaction Branch Telepho ATM Internet Mobile SMS Email Wallets
ne Banking Banking
Open or close an account Yes Yes
Apply for a loan Yes Yes Yes Yes
Seek financial advice Yes Yes
Report a problem or annoyance Yes Yes Yes Yes
Inquire about a fee or service charge Yes Yes Yes
Make deposits Yes Yes
Withdraw money Yes Yes
Learn about products and services Yes Yes Yes
Receive statements / specific information Yes Yes
Transfer funds between accounts Yes Yes
Bill Payments Yes Yes
Transaction alerts Yes Yes
Channel preference - Customers response when a contact
is initiated by the bank and for what kind of product?
Touch point used by customer to interact with Touch point used by Bank to interact with
Bank customer
7 12
6
6 10
10
5
5
8
7
4

3 3 6
5
3

2 2 4
2 3

1 2
1

0 0
Frequency Frequency
Branch Internet Mobile app Email Telephone Social Media Mobile app Email Telephone Salesperson Social Media
Why analysing channel choices is important
 Targeted Marketing Campaigns
 High degree of customer-initiated contacts to be associated with
multichannel purchase – Send cross sell offers
 The higher the frequency of Web-based, contacts the higher the
likelihood of multichannel purchase – Cross sell offers through
alternate channels
 The higher the number of communication channels a supplier uses to
contact a customer, the higher the likelihood of that customer purchase
through multiple channels.
What are benefits of giving Omni-channel
experience
 Increase in sales
 Quick response to customer demands
 More engagement
 Decreases transaction cost
 Retargeting and remarketing (Clicked on an e-mail, reinforced on
facebook or webenvironment)
Some Omnichannel examples from retail and
telecom
Retail
Telecom
A few banks are also omnichannel, digital innovators

Digital Eagles Mobile Appointments

Barclays has 6,500 ‘Digital Eagles’ across its branch ING Belgium’s mobile app allows customers to click for
network to help customers use Barclay’s digital services an appointment with a named staff member in-branch.
and related technologies.

36
What can we learn from retail Industry
Customers’ omnichannel expectation driven by retail
Customers are having more and better omnichannel experiences from a retail sector that is
continuously innovating with digital integration in store.

Argos enables customers to shop Sainsbury’s Scan & Go gets C&A (Brazil) displays real-time
online and collect in-store with its customers through checkout more Facebook likes for fashion items
‘Click & Collect’ functionality. quickly. Customers scan their own displayed on hangers.
items via mobile app.

37
The next frontier for CRM: Tackling show rooming
effect
 CRM is being redesignated as customer experience and customer
relationship management
 Search online – purchase offline (physical branches / store)
 Search offline (physical branches / store) – purchase online
 Simultaneous - Purchase offline (physical branches / store) – searching
online for information
 Retail showrooming video
 Factors Influencing this behaviour –
 Price comparison
 Confusing online reviews
 Experience
 Waiting time for service
 CUSTOMER RELATIONSHIP
MANAGEMENT AT BANCAJA

Ateeque Shaikh, IIM Jammu

Learning objectives
 Learn about the strategy and implementation approach of CRM
 To recognize the importance of practicing CRM not only in marketing
function but to be adopted by the entire organization
 To recognize the importance of human resources and the IT function
company wide CRM strategy
 To understand the approach of designing a CRM programme
Case questions
 Case questions
 Identify and discuss the role of different protagonist in the case
 Situation analysis
 What is Bancaja’s CEO contemplating?
 Discuss the history and background of Bancaja
 What is the strategic plan to address three pressing issues?
 Application areas of analytics in the CRM project design
 Discuss the strategy of implementing CRM at Bancaja. The implementation is pilot based or for the
entire organization? The reasons for the given approach
 Is the credit card project appropriate for launching CRM at Bancaja?
 Discuss the approach of progressively developing customer intelligence through the CRM programme.
What are the building blocks of developing the CRM programme.
 The link between the strategy, structure, people, processes and CRM programme
 The Possible key drivers for successful implementation of CRM
Based on the case - design customer lifecycle

Reach

Prospect and
Advocacy solicitation
management

Loyalty Account
acquisition

Develop &
Churn & nurture
Retention
Cross-Sell
Framework for designing CRM programme
1. Create a
Demographics
database 2. What will you do
with the data? –
Transactions Analyse
Descriptive Information related to account Descriptive
Product engagement Predictive
Channel Engagement 3. Customer Prescriptive
Response to Marketing campaign selection
criteria

Customer Service 6. Outcome / metrics

4. Customer 5. Relationship
Customer Service Frequency Customer Profitability
Targeting (Digital Marketing
Customer complaints Customer lifetime
Customer Satisfaction channel) value
(Segmentation - Pre-approved
personalization products
6. Privacy
issues Churn prediction
Retention
Framework for CRM Design
 Activities and processes for implementing CRM
Analytical CRM Operational CRM
Test & learn strategy Test & learn
Customer risk assessment Call centre operations
Use of external database to complement customer analysis Sales operations
Customer segmentation Cross-selling
New product development Qualitative feedback from senior managers
Calculating customer profitability Launch of new products
Calculating customer lifetime value Use of direct mail for prospect solicitation
Customer Churn /Cross-Sell / Retention

IT HR
Customer database - integrating all the legacy systems Scientific hiring process
Online Realtime data access and processing 360 performance appraisal
No outsourcing of IT Key drivers of employee satisfaction
prospecting database Employee evaluation
Fraud monitoring Organization in teams
Intense interaction with most departments Competition between call centre teams
Personalization of own workspace
The criteria to be considered before implementing
CRM
 Information rich environment – data – can you capture the data?
 Frequent interaction – (Service / product) omnichannel – essence of
CRM – B&FS, Insurance, Telecom, Hospitality, Auto, Retail, Real Estate,
Educational Institutes
 Direct to end consumer sales
 One to one level
 Customer switching cost
 Every interaction is recorded
 Alternate channels to manage
CRM datawarehouse structure
 https://docs.oracle.com/cd/E41507_01/epm91pbr3/eng/epm/pcrw
/concept_UnderstandingtheCRMWarehouseStructure-399bf2.html
Show data
 D:\0.0 NIBM\2.0 TEACHING\1.0 MBA\2.0 Marketing research and
analytics\4.1 Workshop on customer analytics in Banking\0.01 Data
sets
 Problems in constructing database of customers -
Sectors
Customer interaction
Direct Indirect
Frequency of interaction Easy to construct – Can go ahead with Can direct channel be introduced?
CRM Implementation

High Banks Packaged goods

Telecom Drugs / Pharmaceutical
Retail FMCG
Can go ahead with CRM Difficult to construct
Implementation Can direct channels be introduced?
Can frequency of interaction be
Hospitality increased with opportunity for data
Low Airlines capturing?
Personal computers (DELL)
Furniture (Though this is changing)
Automobile (This is changing)
Database creation examples
 The networking company 3com created a worldwide customer
database from 50 legacy databases scattered through their global
operations – SBI did this in India
 Thomson Holidays – build database on customer and their trips to
recommend next trips
 Can Procter and Gamble and Unilever build similar kind of data?
 Lack of systematic information about their millions of customers and
the fact that they use intermediaries that prohibit direct contact
An organizing framework for CRM design
Frequenc
y/
Loyalty
programs
Retention Customiz
program ation

CRM:
Satisfaction Communit
Referral y
program Building

Customer Rewards
Service Program
An organizing framework CRM design
Industry factor Organizational factor CRM performance

• Degree of customer • Top management • Customer behaviour

heterogeneity (cost to orientation • Customer attitude
serve) • Integration of • Learning about the
• Level of interaction organizational processes customer
• Directness of contact • Technology alignment and • Profitability
• Type and frequency of information capture • Product and service
category purchase • Implementation adjustment
• Nature of product • Analytical / Operational
Organizing framework for CRM
• Campaigns • Assign leads
• Generate • Qualify leads
leads • Convert leads
• Database • Track
opportunities

Marketing Sales

Service /
Metrics Order
Delivery
• Service
• Customer Satisfaction Quality
• Loyalty • Service
• Outcomes of Various CRM Delivery
Programs
Application of CRM activities and processes to other
sectors
The future of CRM: What the case says?
 Customer Service robots
 Co-ordinating channels
 Chatbots

 https://www.youtube.com/watch?v=SX5y7dFMHi8
 https://www.youtube.com/watch?v=rrvVQ6sKtQw
 Incorporating social into CRM
 https://www.youtube.com/watch?v=dzYxIQn4whc
I am being narcissist!!!