CRM: A Loyal Customer Means Money

The CRM market is expected to grow significantly in the next three years, up by a whopping 156%That customer is king is finally finding favor in sales-centric corporate
India. Admittedly, companies have been focussed towards addressing customer
needs for some time, but the concept of creating customer loyalty has never
figured high on any boardroom agenda. All that is changing now, with a ‘sale’
changing in relevance–from being the end of the chain, a successful sale is
now emerging as only the beginning of a larger picture, that of retaining the
customer for a future sale, or for his resultant brand loyalty leading to a
fresh one.

Till recently, customer service was never high on any corporate priority
list. But in the face of increasing competition and access to all veins of
resources, there is a compulsion to keep up with global standards. With product
features largely the same, customer relationship management is the key
differentiator and driver for your business.

“Large FMCG companies that have been catering to the masses for a long
time are now showing interest in interacting directly with the consumer to
understand his needs better. Till now, their only link with the customer was
through the channel partners,” says Sumeet Kapur, CEO, Global Groupware

The rising awareness and acceptance for CRM solutions are clearly visible,
especially among the larger companies. In a survey conducted by IDC, while 72%
of large corporations showed interest, 30% of SMEs also appeared keen on
adoption of the CRM model. The overall market is expected to grow from Rs 634
million this year to about Rs 1.627 billion by 2003-04. As IDC assistant manager
Vibhas Amawate says, “Earlier, we had a seller-driven market where
companies could decide what they wanted to sell and who to. Today, however, the
consumer becoming more aware and having so many options on hand, has started
asserting his needs and these cannot be ignored. To do that would mean losing
him to a competitor.” Tapping in on customer loyalty, therefore, is
becoming critical for brand building.

The Big Bang approach

Whether it is to economize or a lack of long-term vision, most large companies use CRM only for automating pre-sales activities and sales managementOnce a company decides to adopt a CRM solution, the next obvious question is
how to implement. Should it go for a Big Bang approach and adopt all modules at
once or should it select only the ones that are most crucial? Depending on the
number of modules you select and the vendor you buy them from, the cost of a
solution can range in cost between Rs 25,000 and Rs 30 lakh. Whether to
economize on investment or sheer management myopia, it turns out that most of
the large companies (over 60% of them, according to IDC) show a preference for
automating pre-sales activities and sales management. In fact, CRM is seen by
some as only a ‘sales automation package’.

Experts, however, warn that this piecemeal approach could be detrimental to
the image of the company. “CRM is about a customer’s life cycle
management and should be adopted in totality,” says Kapur. “If you
really want to create a loyal customer, it is important to ensure that you are
delivering the same quality of service across all functional areas, whether it
is sales or customer care and across all branches, be it Bangalore or Mumbai.”

However, if you don’t have enough resources to go all out in one go, not to
fret…you could implement in a phased manner, depending on the requirements of
your business. For instance, a car manufacturer cannot expect his existing
customer to continue buying cars from him repeatedly, for the cycle would
stretch into years. Here, acquisition becomes more important than retention. But
if you have a large range of products, it becomes important to retain and tap
your existing customer base.

Creating loyalty

CRM vendors can be broadly divided into three categories, those catering to MNCs, SMEs and ERMs. Depending on the number of modules you select and the vendor you buy from, the cost of a solution can range between Rs 25,000 and Rs 30 lakhA CRM solution can be used to deliver personalized marketing and sales of
products and services to the customer. By being proactive in anticipating his
needs, a company can create a loyal base of customers. Retention, which proves
more cost effective than acquisition, can be particularly useful for a
service-oriented organization, especially in sectors like banking. Indian banks
such as ICICI and HDFC are deploying CRM solutions to compete with MNC banks.

"More and more companies are now realizing the significance of tapping
the right customer and cater to his needs through personalized services. Look at
companies like Dell that are totally customer driven. Now the whole world is
moving towards direct marketing," says Ajay Mian, CEO, All e Technologies.

A call center, which is seen as the primary driver of the CRM market, allows
companies to integrate their sales and customer services efforts into one cycle.
The availability of low-cost English speaking manpower in India has led to the
growth of call centers throughout the country, that cater to both domestic and
international customers.

Increasing level of Internet usage is expected to drive the use of e-CRM
among Indian companies. Kapur points out, "e-CRM is useful only if 90% of
your customer interaction is on the web. With more and more companies moving to
the click-and-brick model, even e-CRM will have to be supported by a strong
offline presence."

Whatever be your point of contact, phone, web, office or retail outlet, the
bottomline is that every effort for contact management should strike a balance
between customer needs and company’s goals.

Adapt and adopt

In the SME segment, the services industry, which includes finance, telecom, call-centers, IT and hospitality, is keenest to adopt CRMAny CRM process is mainly built around three areas: Interactive management,
business processes and knowledge management. While most developed countries have
reached the third stage and are now increasing the level of personalization in
their customer services, Indian companies need to first get their basic
interaction and processes in place first. "The developed countries already
have their business processes in place so they can easily go for knowledge
management. But Indian companies have had a very uneven growth, they shouldn’t
attempt KM even before they get the basic processes right," explains Kapur.
"If you are not able to solve your customer’s product-related problems,
there is no way you can please him by remembering his birthday or
anniversary," he adds with a smile.

Why do CRM initiatives fail?

According to the Gartner Group: "CRM is a customer-focused business
strategy designed to optimize profitability, revenue and customer
satisfaction." The reason why most CRM initiatives also fail to yield
desired results is because it is difficult to quantify the benefits. Simply put,
customer satisfaction is not measurable.

The mistake most enterprises make to delegate CRM implementation to the IT
department. "The most successful projects are those supported by the chief
financial officer who can see clearly that such a project will have a positive
impact on shareholder value,"says Amawate.

Although companies have been trying to devise RoI-based models, none of the
current CRM packages can directly link customer relationship with revenues. Even
after making a customer happy, retaining may not be that easy. Moreover, an
enterprise also needs to devise tactics to generate business from him. So, the
onus is really your ability to take control over the battlefield. For all you
know, winning a customer’s heart might just be easier than making your wife

Shweta Verma in New Delhi

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