Customer Relationship
Management
Chapter-1
CRM: An Introduction
1
CRM
• helps companies in searching new customers, achieving their
objectives, and retaining customers.
• In this all the traditional activities of sales, marketing and
customer service are integrated into a system which in totality
manages the entire life cycle of a customer.
• The organization feel confident that the information accessed
by them will help their sales team to understand the needs as
well as purchasing patterns of customers.
• is an integral part of a company’s customer-focused business
strategy which includes people, processes as well as
technology, and also includes all the questions associated with
marketing, sales, and service.
2
Evolution of Relationship Marketing
• Relationship marketing as a concept was first
given by Leonard Berry in 1983.
• Berry claimed that relationship marketing
consist of attracting, maintaining and enhancing
customer relationships within organizations.
• With the changing times, the companies started
engaging themselves in more meaningful
dialogues with their individual customers to
sustain relationships and hence satisfy them
better when compared to their competitors.
3
CRM
• Companies therefore in these situations have
become customer centric
• They must therefore understand their
customers, engage with them and build
relations with them.
• The outcome of the evolution of Relationship
Marketing has given birth of CRM solutions
which enhances strong customer orientation.
4
Difference between Transactional and Relationship
based marketing
• Marketing focuses on gaining customers and
enhancing its profits through better strategies.
• But both relationship marketing and transactional
marketing have different points.
• The transactional approach focuses mainly on sales
as well as profits while relationship marketing
focuses on establishing better relationships with its
customers.
5
Transactional Marketing•It is based on a single objective where the organization looks
for more sales and profits.
•It includes all the marketing activities like advertising and
promotion which are devised for enhancing sales immediately.
•In this the company emphasizes not only on single sales but
on achieving larger volume of sales.
•They go for a high sales pitch on QVC (Quality, Value and
Convenience) as they visualize that the manufacturers are busy
in their production and sales.
•They do not have time to build relations.
•They rather believe in providing incentives, discounts as well
as creating a favorable pitch for their product for achieving
higher sales in a short time.
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Relationship Marketing
• In this the company’s focus is on building long term relationships with its
customers and hence achieve better sales in future.
• It also helps the company in understanding their customers, its needs and
wants, so that a profitable exchange relationship is created with them.
• It also helps in providing better satisfaction to its customers, retaining them
and also helps the company in acquiring more customers.
• To make relationship marketing more effective the company tries to
enhance its contact with both its current as well as potential customers.
• This is possible through its sales staff to its point of sales displays to better
handling of customers through their customer service representatives.
• Relationship Marketing strategies also includes branding, service training
of its customers, developing community as well as enhancing its
relationship in the media, through even social media, newsletters, blogs,
referral programs as well as frequent buyer incentives.
7
Relationship
Marketing
Emphasis on all
market domains and
customer retention
Emphasis on
Customer acquisition
Transactional
Marketing
Functionally based
marketing
Cross-functionality
based marketing
Transition to relationship marketing
8
Dentist
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•
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•
•
•
•
•
Information stored by dentists are very important to their businesses.
In this the appointments received by the dentists are the key to their business and its
efficiency lies in creation of their database.
The dentist tries to collect all the information of their customers in a database and
then want to regularly update it further.
These information helps them in sending an e-mail or SMS or a mixture of both to
their customers.
This helps them to keep appointments and send them reminders about their
appointments in advance.
These may also be personalized also and may be beneficial for both the parties as
they see it as a value added service,
This enhances their efficiency and promptness in their service and also. Minimizes
the delay and put a check on missed appointments.
This also helps them in maintaining better relations with their customers and also
enhancing their satisfaction level.
9
Restaurant
•Information stored by restaurants are very important to their businesses.
• In all these the personal information of their customers their addresses, phone number , days of
visit as well as the type of food taken, its value etc are the key to their businesses.
• All these information are very helpful for them in planning their future strategies in regards to
enhancing their clientele as well as loyalty in markets.
• Since the restaurant or the food business success stands on the culinary habits of their clientele,
they try their best to take a view of their historical records and the type of cuisine liked by their
clientele in regards to their regular dining or in parties organized by them at their restaurant.
• Their efficiency actually lies in better storage of these data and a regular analysis further for
devising better strategies, most suitable to its markets.
• This also helps them in maintaining their CRM activities successfully with better results.
• This is done successfully as their esteemed clients and regular customers are informed further of
the new cuisines being made available for them and also taking a note of their feedbacks in
regards to the food served by them and the service given to them in their restaurant..
• All these information are stored, updated and used with a better approach.
• This therefore helps them to learn and enhance the quality of their food and service based on the
expectations of their clients and customers.
• The database is also used for sending an e-mail or SMS or a mixture of both to their customers as
well as clients.
• This helps them in booking their specific tables for their dining or parties and giving them a better
and personalized service. This is beneficial for both the parties as they see it as a value added
service.
10
Car Dealers
•
•
•
•
•
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They store all the information of their customers which they keep on receiving
regularly during their contact with customers as he approaches them while buying a
new car.
They update the same and from time to time they send the customer their brochures
as well as information about their models which is recorded in their CLIM8.
After enhancing their interest they book a test drive for the customer and then his
information and feedback is further updated.
When the customer finalizes his decision to buy the car after the test drive, all his
information are transferred from the CLIM8 software and the dealer do not have to
feed the data again and again.
All his information as well as details are copied and rewritten on the multiple forms
as well as contracts.
This further streamlines all the processes of the company and enhances the
efficiency of the organization and also performs their daily activity quickly.
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Three Levels of Customers
•
CRM builds relationships with the help of technology, strategic planning and the
techniques of marketing which enhances the productivity as well as profit margins
of organizations.
• The focus, therefore ,is on a customer who lies at the core of all business processes
and practices, and is based on the philosophy to support sales, marketing, order
fulfillment and services.
• This is achieved by adoption of new technologies by small and large organizations
that are now recognizing the importance and value of customer retention.
Based on the satisfaction level, we can divide customers into three levels:
1. Zone of defection: When the satisfaction and loyalty of the customers are at the
lowest level.
2. Zone of indifference: When the satisfaction and loyalty of the customers are on a
medium level, and they are not very sure about themselves.
3. Zone of affection: This is the third and highest level of satisfaction and loyalty of
customers .
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ZONE OF AFFECTION
ZONE OF INDIFFERENCE
ZONE OF DEFECTION
THREE LEVELS OF CUSTOMERS
13
KLM Airlines
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•
•
•
•
•
•
•
•
KLM is one of the airlines which have taken CRM very seriously, though its airline
seats were going full.
Its financial condition was also very well but the management felt that even when
the airlines could not enlarge its capacity, it must try its best to enhance the
revenues per customer.
This therefore could only be possible if they tried to utilize the insight of their
customers by enhancing the quality of their service.
This would then improve the customer experience and therefore also their turnover.
But this was not at all accepted before as CRM software was costly and its success
was not justified because they were doing good business as their market was
favorable.
But with the increasing competition every airline started offering a seat, staff and
service for a price.
Differentiation therefore became a key factor for these airlines and in these
moments KLM they initiated strategies of differentiation based on emotional
elements.
For this they changed their positioning of reliability and comfort with an enhanced
personal touch.
They planned their CRM in three phases change management, database of
customers and campaign management.
They started with CARE, which signified Customer acquisition, Activation,
Retention and Extension.
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KLM Airlines
So, they organized KLM around these objectives with everyone being given a target.
• They also opted for Epiphany’s, a CRM suite which was opted after analyzing various software
available in the market
• They therefore maintained a central database and also abided by the software company suggestion to
build the software layer above the current systems ranging from booking, checking in of the customers
to its customer complaint handling .
• This also required further importing of the data needed in this process to fill the virtual customer
model.
• With this the employees at KLM were able to have a look at the check-in-data on their screen but also
information about the past customer behavior as well as preferences.
• This helped them to analyze these historical records and take better decisions.
• Today the airline marketing has totally changed and they do not sell flights any more, but they sell
processes.
• They sell lounges, gates, websites, as well as seat environments and therefore must understand their
customers as well as their wishes to fulfill them further.
• The database therefore allowed them to have a complete view of all the services provided by them,
about their lounge facilities or about on board facilities on a real time basis at the end of each year.
• Various data about the customer in regards to their height or weight must be looked for further and
allotted a proper seat with additional space based on their height or weight so that they do not have the
problem which they faced before and could be cared for before they ask for.
• The same thing can be applied in regards to the baggage as the customer might had a problem in
locating the baggage, so this time the airline takes utmost care of their baggage during check in and
also inform them that the baggage has been checked properly.
• This will certainly bring a satisfaction in them as they will feel personalized and have a delight that the
organization cares for them.
• All these initiatives certainly enhanced the customer satisfaction of their consumers as every body in
the organization from top to bottom tried to utilize information and enhance their approach through
personalized service.
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Evolution of CRM
We can categorize the same based on three aspects
1.Transaction – which can be visualized during the period of 1990’s where the
important aspects in the organization comprised of processes in the organization. These
processes streamlined the work in organization and also captured as well as stored the
data which was created during the process. This also enhanced the visibility of
organization as our markets were growing and a lot of management control was exerted
to enhance the effectiveness of CRM in organization. This was a period where CRM
was based more on transactions as well as historical records and their approach was
focused for better actions.
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Evolution of CRM
2. Analyze- The next phase in the evolution of CRM came around 2000 where the
organization tried its best to utilize the historical records and use the advances in Information
Technology (IT) to their advantage. This was possible through better decision support system
and then utilizing these data for better analysis. This analysis was done by storing data through
better data warehousing techniques and utilizing analytical applications further in creation of
predictive trends in regards to the demand and supply in markets. This helped them further in
streamlining their processes and operations by utilizing their resources effectively and then
enhancing its performance further.
3.Engage – In this till 2015 we visualize that there has been a tremendous change in regards to
the technology used in CRM as well as the approach in organizations where customers are
valued and more and more feedbacks are taken into consideration. These approaches have
given a further change in the organization dynamics and CRM activities now are done through
various conversations which takes place through various customer contacts at various touch
points, through social networking where likes and dislikes are very much visualized and talked
about. All these CRM initiatives also help the organization in creation of better strategies and
they look forward for more collaboration to enhance their effectiveness and also enhance their
boundaries further.
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Transact
Analyze
Process
Automation
Data Capture
Increased
visibility
Management
Control
1990’s
Engage
Decision Support
Conversations
Predictive Trends
Social Networking
Data Warehousing
Analytical
Applications
2000’s
Collaboration
Cross Boundary
2015's
EVOLUTION OF CRM
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CRM as a business strategy
Florist Shop –
• In the local florist shop in a metro generally the customer visits them to buy flowers
for birthday of their relatives (either wife, brother, son, daughter, friends or
relatives).
• Each year various customers visit the florist shops and then pick their choicest
flowers (which are the favorite for their wives, brothers, sons, daughters, friends as
well as relatives).
• The florist tries to store all these information apart from his details. This helps the
organization in sending his customer an alert a fortnight in advance and confirm
with him whether he will like it to be delivered at the specified destination on those
particular dates or time.
• This makes the customer feel more important as the florist company remembered
their birthday of their near and dear ones.
• This helps them in enhancing their personal approach and also helps them in
promoting their business further.
• Various other databases could also be prepared, filtered and used similarly for
different occasions like Valentine’s Day, Father’s Day, Mother’s Day etc to put
more emphasis on the occasion and enhance their business further.
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Reasons for the rise of CRM
(i) Changed focus in companies from transactional marketing (
which involved transactions between two parties involving profits)
to relationship marketing (building relations and retaining them
further by enhancing the loyalty factor in them).
(ii) Realization in companies about the importance of its
customers as a business asset where relationships can be further
developed to improve customer retention and profitability. This is
possible as it identifies the most profitable customers and builds
relationships with them.
(iii) Structuring of organization on a strategic basis from functions
to processes for better internal coordination and collaboration
delivering value to customers and suppliers.
(iv) Recognizing the benefits of information and utilizing it further
proactively by anticipating future customer needs as well as
satisfying their current requirements. Moving from ‘mass market’
to ‘mass customization
20
Reasons for the rise of CRM
(v)Utilization of technology in managing and
maximizing the information value by increasing
effectiveness
(a) Data repository: A data repository enables the
organization to collect customer information which are
used with a set of analytical tools to develop a better
understanding of its past, present and future behaviors.
(b)Set of applications: A set of applications enables
value additions during its interactions with customers
across different channels in order to fulfill their needs.
Various technological innovations, such as clever screen
prompts, advise the customer service representative of a
customer’s profile and appropriate tactics of a call
center for increasing cross-selling and up selling in
organizations.
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Reasons for the rise of CRM
(vi)Development
of
one-to-one
marketing
approaches by identifying proper target markets based
on age, sex or lifestyle by providing specific solutions to
their needs in both consumer and business markets. (vii)
Balancing the value trade-off -The overall value
creation process has three components, determining
what value the company delivers to its customers, the
value which an organization can extract from its
customers, and by managing this value exchange,
maximizing the lifetime value of desirable customers
and customer segments. Relationships are, therefore,
built on the creation and delivery of better customer
value on a regular basis.
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Types of CRM
CRM can be categorized in to three types based on its characteristics.
1. Operational CRM:
•
•
•
•
•
Operational CRM is the customer-facing application in an organization and is
concerned with the automation of business processes involving initial customer
contact points.
This is a major area where expenditure takes place in a company and includes sales
automation, marketing automation and customer service automation.
The companies develop call center to enhance the effectiveness of the operational
side of the company.
CRM vendors, therefore, provide a wide range of operational CRM solutions today
to fill this vacuum.
It facilitates a better customer experience as well as optimization of their customer
contact activities. Operational CRM also creates value for their enterprise as well as
customers.
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Operational CRM
Analytical CRM
Collaborative CRM
Three types of CRM
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ABS Builders
A builder has an operational CRM installed in its organization. This is basically a front
office CRM and it takes care of all the customer contact which takes place in selling of
the flats by the builder. These touch points with the customers are the inbound contacts
which takes place between the customer through phone, fax, e-mail, web access, direct
sales, as well as their call centers. This streamlines the communication of the company
by receiving the calls and attending it prudently. All these call are recorded and based
on that they are replied efficiently based on the enquiries received by the customer,
passed to the sales team and then actions done for better contact, efficiency and sales of
the flats through its sales persons.
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CUSTOMERS
Call Center
CUSTOMER
Web
access
E-mail
Fax
Direct
sales
BUSINESS ACTIONS
OPERATIONAL CRM
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2. Analytical CRM
In this, all the data collected in the operational side of the business is captured, stored,
organized, and a further analysis and interpretation is done for better value analysis.
Integration of analytical CRM with operational CRM, therefore, becomes a key factor
for success in the organization. It enables the company to target the right customers
with appropriate offers. Analytical CRM results in personalization as well as
one-to-one marketing through better customer knowledge. It identifies opportunities
and helps the organization in implementing an effective strategy which enhances its
competitive advantage further. This converts raw data to support business decisions
using customer-facing technologies like collaborative filtering, predictive modeling,
business rules as well as state-based decision-making. This has the capability to
identify opportunities and implement an effective strategy for enhancing its competitive
advantage.
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BUSINESS ACTIONS
ANALYSIS
BUSINESS
INTELLIGENCE
INTEGRATION OF DATABASE
INFORMATION
BUSINESS
SYSTEMS
PROCESS
IMPROVEMENT
BILLING
ACCOUNTS
PAYABLE/
RECEIVABLES
SALES
FEEDBACK OF
CUSTOMERS
CALL
CENTER
ANALYTICAL CRM
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Standard Chartered Bank
Analytical CRM is also known as “back office” or Strategic CRM”. This involves
understanding of the customer activities through the front office and is helped by the
technology where the data and information received are analyzed and new business processes
are visualized for better actions. This is done through various Business Intelligence activities
where analysis are done for better business actions.
Standard Chartered Bank has successfully deployed Analytical CRM for its maximum
advantage and has helped the bank in managing and optimizing the profitability effectively for
all the products existing in their retail portfolio. With this the Standard Chartered Bank gets
help and feels easy in running targeted campaigns. This has also enhanced its returns with the
help of its profit modeling for all its account. The CRM solution adopted helps it in doing
micro-segmentation. With the help of analytics and a test-and-learn culture, the bank is able to
predict the probability of customers who will be able to adopt its new products being launched
in the market. They are even able to know whether a member using its card intends to take a
car loan or not. This has also helped the bank in developing more focused marketing
campaigns based on the expectations of its consumers. This has further reduced its costs
further and have also enhanced the satisfaction of its customers.
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3. Collaborative CRM
In this, the company interacts among its departments, divisions as well as its channels
by using its collaborative services and also its infrastructure. This takes place through
interaction between its divisions as well as its departments, customers as well as its
employees. It is also integrated with its database and the financial modules of an ERP
system, to enhance the productivity of the organization. It enhances revenues as it
provides immense scope for generating sales leads. It takes care of various touch points
of customers such as e-mail, phone calls, fax, web portal, and snail mail. This also
helps the organization in devising better channel management strategies and also
integrates advanced systems at each and every customer touch point, which also
enhances the efficiency and productivity of organization.
Successful CRM, therefore, emerges after the integration of all these three components,
which need to support each other and thus results in a better customer experience.
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Evans and Luskin (1994) Model for Effective Relationship
Marketing
This model proposed by Evans and Luskin (1994) talks of three aspects: (i) relationship
marketing inputs, (ii) relation marketing outcomes and assessment state to complete the
CRM process.
Relationship Marketing Inputs comprises of an understanding of customer and their
expectations, building partnerships, empowering of employees to take decisions which
further results in better quality delivery. This results in better satisfaction of consumers
and creates better relations for consumers resulting in customer satisfaction if the
quality of product/service is maintained. In the long run, it adds to the profitability of
the company. These are the relationship outcomes and the assessment is done through
customer feedback taken by the company from customers at regular intervals.
This completes the cycle in this Model and based on the feedback the company can
correct them and enhance their market as well as acceptability with the changing times.
This is a very useful model and covers all the aspects of CRM which is useful in the
company.
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Inputs of relationship marketing
Understanding customer
expectations
Building service partnerships
Empowering employees
Total quality management
Assessment state
•Customer feedback
•Integration
Relationship
marketing outcomes
•Customer satisfaction
•Customer loyalty
•Quality products
•Increased profitability
Evans and Luskin (1994) Mode
(Adapted from Evans, J. R. &Laskin, R. L (1994). “Relationship Marketing can help a Firm Escape Commodity like Status”, “Industrial
Marketing Management, 23,5 , p. 440–1).
32
l
Brock and Barcklay (1999) Model of Selling Partner Relationship
Effectiveness
•This model was proposed by Brock and Barcklay in 1999. It talks of the independence
of doing business and the relative influence of the companies. These are the two pillars
and the third pillar is the Selling Partner Effectiveness, which is responsible in
clinching the consumer. This will only be possible if there is a mutual trust and
co-operation existing in the company and the consumer. Then only the relationship can
be established for a longer term and both will only benefit themselves if both have a
faith and co-operation between each other.
•This is one of the recent models and holds true in the prevalent competitive situation
of market
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Independence
Mutual trust
Cooperation
Selling partner
relationship
effectiveness
Relative influence
Brock and Barcklay (1999) Model (Adapted from Evans, J. R. &Laskin, R. L (1994). “Relationship
Marketing can help a Firm Escape Commodity like Status”, “Industrial Marketing Management, 23,5 , p.
440–1).
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Peppers & Rogers - IDIC MODEL
•This model suggests that companies must develop one to one relations with
its customers and this is only possible when they involve themselves in
identifying customers, building relations with them and also retaining them
further on a long term basis with its customers.
Identify - A company should at first identify their customer and enhance their
knowledge about them, so that they take care of them in a better way and also
serve them profitably in the long run.
Differentiate– The customer is differentiated based on two aspects:
a.
b.
Need - which differs between different customers and can only be assessed
if they are understood better?
Value – by which they are differentiated based on who generate most value
at present and who has the chance to offer more in future.
35
Information to the organisation in regards
to their customers as well as their needs
Identify
your
customers
Differentiate
customers
by value
The ‘Value
Sieve’
Differentiate
the
customers
based on
their needs
Interact with
customers
based on their
needs and
values
Customize
your products
and services
based on the
needs of the
customer
Information to customers on your
ability to cope up with their needs
IDIC MODEL
(The IDIC model was first published in 1997 in The One to One Fieldbook, by Don Peppers and Martha Rogers, Ph.D.
Identify-Differentiate-Interact-Customize © Peppers & Rogers Group).
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Peppers & Rogers - IDIC
MODEL
Interaction – The Company must lay much emphasis on its interaction with the
customer because it helps them to understand the expectation of customer in a better
way and are also able to create relationship with their brand. The interaction of the
customer must vary based on their needs as well as value provided by them. The
direct interaction with the customer makes them believe that the company is
interested in them and they want to serve them better. These efforts by the company
enhance their loyalty factor and also help the company to build long lasting relations.
Customize - When the customers are differentiated based on their needs and values,
then the company also has to change their offerings and make their products
customized based on the needs and wants of customers. The communications are
also tailored similarly to meet their expectations and are customized to meet their
needs and requirements.
The failure in the third step signifies that there is something wrong with the second as
well as the third steps. So in this case we have to return as well as go back to the
previous steps and then study them again. This is possible when we search out more
and more and then rearrange these steps again to achieve better results.
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Principles of CRM
•
▪
▪
▪
▪
▪
CRM is not about only purchasing software, but it
is a strategy to succeed.
CRM must be in conducive to the work
environment, present as well as future.
In CRM, Quantitative goals have to be set and
benchmarked.
Total cost of CRM Implementation must be
understood carefully.
Selection of the right partner to find the CRM
solution.
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Technology Components of CRM
(i) CRM engine: It is the data repository of customers or the data mart or the data
warehouse in the organization where all the data of customers are captured and stored.
CRM engine comprises basic information of the consumers such as name, address,
phone numbers and date of birth. It may contain more information in regards to the
number of time a person accesses a particular website and what he/she does on the
pages accessed with the time spent. CRM engine provides personalization and is a
single point where all the information of individual customer are created and a unified
view of customer can be created throughout all the departments of the company which
require these data stored in the CRM engine.
(ii) Front office solutions: These are applications which run on top of the customer
data warehouse (CDW). It could be SFA (Sales Force Automation), EMA (Enterprise
Marketing Automation), or service and support as well as customer interaction
applications. These front office solutions create analytics, reports as well as instant
access to information.
All these operate in the client server architecture (environment) and provide the
employees with all the information on what they must do next with the customer.
Specific applications provide an element of self service for the customer.
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Technology Components of CRM
(iii) Enterprise Application Integrations (EAIs) for CRM: These are found
between the CRM back office and front office, and also exist between the
newly installed CRM system and the enterprise legacy systems. They provide
the messaging services and data mapping services that allows one system to
communicate with other system. They also allow CRM-to-CRM
communications. They are pieces of codes as well as connectors and they
bridge like a body. These were previously known as “middleware”.
(iv) CRM in the Back office: All the analytical tools used in CRM are known
as back office of CRM as all the analytical algorithms work in the background
and they have a clear visibility within the operational applications and are
accessed based on the real time basis. Analytics are becoming integrated from
the elements of CRM because embedded analytics are now a part of
multifunctional CRM applications.
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•
Various CRM Trends visualized today
1.Business Analytics
Firms are feeling the need to analyze their customers further and find out as what makes them
satisfied. Hence, they are encouraging their teams for doing analytics and also working closer
with their customers which will further help the organization in enhancing its productivity as
well as profitability.
2.CRM goes Mobile
Today with the increase in the number of mobiles the connect with the companies as well as the
collection of information through CRM has gone mobile. This trend is gaining ground fast as in
most companies, the interaction has become necessary and information as well as feedback are
disseminated effectively through mobiles. This has helped customers as well as companies to
access and deliver information effectively at all levels. This has further enhanced the contact at
all levels and have made the customer interface more complex.
3.Integrated Approach towards CRM
Today, the thinking of companies have changed and now they do not think marketing, service
and sales as separate functions, and therefore they intend to integrate all these functions for
better results. CRM research shows that the organization today has a holistic approach and the
CRM vendors must therefore ensure of providing an integrated CRM solution in their CRM
solutions. SAP has developed this approach and because of this they have been able to enhance
their share in market.
4.CRM and the Internet
Internet technology is gaining ground and is helping CRM in a big way by integrating it with
other systems. As in the case of Client Dynamics software with an Internet, search engine helps
the company to register the details of the profiles of customer in the system and with the help of
this software corresponding articles and products similar to these profiles are searched in the
search engine through which the organization takes cues from this information and this helps
them further in devising better strategies in their customer dealings.
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•
Various CRM Trends visualized today
5. Vertical CRM
In this the focus of vendors is on the changing needs of various organizations,
and they try to analyze these differences and synchronize it through
customization and fulfill the individual needs of organizations. Like the CRM
software catering to the legal, financial, accounting and management sector
needs of the organization.
6. Outsourcing CRM
All the companies are feeling the heat of enhancing costs at all levels.
Outsourcing therefore has become essential for organizations to reduce its
costs. Sales activities is one of the area where companies are giving contracts
especially in the segment of generating sales force leads as it helps them in
reducing sales costs through analyzing better prospects.
7. Midmarket Trend -Today, in the mid market the newest trend is the desire
of companies to run licensed CRM applications, like Salesforce, Microsoft,
etc. Apart from this the leaders of the market today are opting more for
partnerships than acquisitions like Sales Net, Netsuite etc. CRM research also
shows that all these players prefer more for flexible as well as customizable
CRM
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Software Applications in the CRM Market
Customer relationship management (CRM) today is an important management tool which
helps organizations to succeed and is one of the fastest selling customer strategies in today’s
world.
CRM market consists of three markets: (i) large enterprises, (ii) mid-market, and (iii) small
market.
i) Market in large business enterprises
For better CRM implementation vendor capability is essential. So, most of the large
companies are in constant lookout for vendors who have done successful implementation in
other big companies in their sector to be sure of their capability and expertise in fulfilling the
assigned asks. CRM vendors also make their effort in finding the right business from big
corporations as it helps them to achieve high Return on Investment (ROI)
.Major players in CRM include:
Oracle
Oracle excels in the large business market due to its hosted CRM, data integration,
functionality and customer satisfaction. It is the option of on premise CRM which has made it
successful in its sector. Its quality have helped it to stay on par with its competitors and excel
further in this sector.
SAP
The success of SAP is based on their expertise in boosting the CRM efficiency and
functionality in organizations. This effort of satisfying its clients has resulted in capturing
large number of large corporations as its clients. Its growth in this sector is phenomenal and at
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present its share in this sector is 13 percent.
Software Applications in the CRM Market
Salesforce.com
The acceptance of Sales force.com is gaining day by day with the advent of internet, still it is
behind large competitors like Oracle etc. It also commands a sizeable share in the CRM market of
large companies but still most of its sales come from it’s product on- demand CRM which has
been accepted well in the market because of its features and application.
PeoplesoftPeopleSoft is known more for its functionality and Customer satisfaction. Its cost of ownership is
low and has an ease of integrating all the processes in the organization. Its revenues from this
sector are not much as its focus is more on small businesses but it has established its footing in this
category
ii) Mid marketMidmarket companies are companies that are earning revenues in between $100 million and $1
billion. This is a market where CRM will be able to give the maximum dividends in terms of
growth and productivity in organizations. Vendors are therefore trying their best to capture this
market as this is where the focus is more on creating new trends and the management are
aggressive enough to bring results because of its dynamism.
PeopleSoft
People Soft Enterprise One as a product has been very successful and has been accepted well
among the companies in the mid market. Today it accounts for the highest number of CRM users
and has resulted in the high growth of the company.
•
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Software Applications in the CRM Market
Salesforce.com
In the mid-market the revenues earned by Salesforce.com is small but it is having a high
growth with the advent of internet as well as changed market conditions. The salient
feature of Sales force.com is its integrative platform as well as its ability for
customization.
Siebel
The success of the Siebel software lies in the integration of UpShot into its software as it
gave a big boost in the efficiency and functioning of mid market companies. Today, 30
percent of its overall profits come from midmarket companies and this is based on the
sales of OnDemand, Siebel Enterprise Product and Midmarket suite.
Microsoft
The focus of Microsoft is on the retention of customers and today this is the pertinent
need of organization in today’s business scenario. It is the best CRM provider today and
has proven results in the companies where it has been installed and today it has a
number of installations and a fair share in the mid market.
SAP
SAP is today emerging as a leader in the CRM market and have around 10 percent share
in the midmarket. It is emerging fast as a leader in the overall CRM market even though
the companies using this product are less in numbers. Its usefulness is helping it to gain
mid-market shares.
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Software Applications in the CRM Market
iii)Small business market
Major players are currently are also trying to cater to smaller businesses. This market
sector can be tremendously profitable provided vendors know just how to tap it. The
change in the CRM trends has resulted in taking attention of this market by the leaders
in the field who are interested to capture this new market because of its future potential.
Microsoft
In this sector, Microsoft’s growth is phenomenal and it is a also a leader in this category.
The cost of this software as well as the server requirements are high, but most of the
small business enterprises have been attracted towards it due to its ease of integration
and usefulness and effectiveness to the company.
Onyx In the small business market, Onyx is a big player and its acceptability has been
high as it caters mostly to the midmarket, especially in the public sector.
NetSuite
Net Suite’s strength lies in its property of customization as well as its ease of integration
and has been growing phenomenally in this sector. It caters mostly to small companies
who are interested in finding better solutions.
There are wide varieties of solutions available in the market for companies but they
must not take CRM only as a fad. They must understand the requirements of their
company and do the implementation in a phased manner, explaining the process and
requirement to their people. They must also spend money based on the savings
envisaged and see the trends of the market and understand the applicability and
suitability of the software before opting the same for their company. They must select
the best package available in the category which can justify the costs in the long run.
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MAJOR SOFTWARE PLAYERS
Large Business Enterprises
Mid Market Enterprises
Small Market Enterprises
Oracle
Microsoft
Microsoft
SAP
SAP
Onyx
Salesforce.com
Salesforce.com
Netsuite
Peoplesoft
Peoplesoft
Siebel
MAJOR SOFTWARE PLAYERS
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