The Hindu Business Line : The importance of CRM

Of course, any good businessman has always understood the importance of developing and nurturing strong equations with the customers. This is as true of large conglomerates such as the Detroit auto majors and the Tatas as it is of a small neighbourhoo d grocer who spends the time of day chatting up the families in the locality.

Excellent commonsense examples of customer relationship management are regularly displayed by the petty trader near my office who spots my colleague walking in and takes out a stick of Gold Flake (this is his daily post-lunch ritual); by the banking clerk at State Bank of India who has memorised my dad’s account number and helpfully fills up the deposit form each month for the monthly pension cheque; and, by the ice-cream vendor who remembers that the child in the corner house celebrates her birthday on June 14 and presents her a free cone on that day.

However, as the scale of operations gets larger and the number of customers grows, such actions are not always possible. It becomes difficult to remember the likes and dislikes of each customer, his or her birthday, and the like.

Nonetheless, the need for personalised attention and service exists; in fact, it becomes even greater as the world is getting ever more competitive.

As businesses get larger, software packages come to the rescue. The CRM industry has grown to keep pace with the requirements of different industries.

A typical CRM software package offers the following facilities:

Stores individual details of a huge number of customers

Tracks transactions with these customers

Records, across multiple points of interaction with the customer (call-centre, sales points, service centres), details of each fresh transaction

Analyses this database to group customers based on their demographic profile, preferences, behaviour patterns and profitability

Flags problem areas such as a reduction in the business from a particular customer.

Alerts / reminds operatives of issues such as customers’ birthdays

Alerts / reminds operatives of more important issues such as payment reminders

to enable cross-selling of services to the customer

and has rigorous security mechanisms in place to ensure that such vital information cannot be misused

An important concept in CRM is Mass Customisation. Let us say person ‘A’ and ‘B’ log in each morning to rediff.com to catch up on the news. ‘A’ likes to read the cricket news first, followed by the day’s music concert listings in his city, and then the national political news. ‘B’ is far more interested in city news, followed by the weather.

If rediff.com decides to mass customise the news page, then it could identify the person based on the log-in id and then show the news in order of preference. As can be seen from this example, Mass Customisation means being able to provide individual customers their own preferred service, and doing this for a large number of customers.

CRM packages come in many sizes — from full-service offerings to small applications that solve one particular need or the other. The industry continues to grow, but sometimes suffers because managers tend to think the software can solve all the requirements. The software can only be a tool that can execute what a customer-oriented team of managers can think of offering as a service.

(Contributed by Ashok R. Sankethi, CEO, Kaybase, a business consulting firm. Mail: ashok@kaybase.com)

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