INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH AND REVIEW

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1 INTERNATIONAL JOURNAL OF MANAGEMENT RESEARCH AND REVIEW E - CRM: AN ULTIMATE STRATEGY FOR AN ORGANIZATION Sagar Deshmukh* 1, N. Deepa 2, A. Raj Shravanthi 3 1 Research Scholar, Dept. of Agrl. and Rural Management, Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu, India. 2 Assistant Professor, Dept. of Agrl. and Rural Management, Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu, India. 3 Research Scholar, Dept. of Agrl. and Rural Management, Tamil Nadu Agricultural ABSTRACT University, Coimbatore, Tamil Nadu, India. Customer relationship management is a business strategy to select and manage relationship with the most valuable customers. The concept of CRM when seen in context of e-business called as e-crm. It provides companies means for conducting personalized, interactive and relevant communication with customers across both traditional and electronic channel. E-CRM integrates traditional CRM and e-business application. It makes possible for an organization to extend its infrastructure to customers and partners in ways that offer new opportunities of learning customer needs, gaining new economies, reaching new customers, adding values and doing these in real time while it might sound very simple, achieving effective e-crm is itself a stupendous task. Companies agree that e-crm is critical to their business, but unfortunately very few understand exactly what it is or how to evolve an e- CRM solution from their existing database marketing practices. 1. INTRODUCTION The concept of customer relationship management is as old as business itself. A small business that serves around thousand customers can build and maintain customer relationships through face-to-face interactions between the staff and the customers. However, with the increase in business size and number of customers, it becomes difficult to build and maintain customer relationships and manage customer information quickly with the involvement of the internet in crm. Firms are able to provide a personalized experience through online help, purchase referrals, quicker turnaround on customer problems and suggestions through customer feedbacks. The concept of crm when seen in the context of e- business becomes e-crm. For the success of crm initiatives and applications an organization requires a committed workforce. Hence, human resource management (hrm) policies of an organization must be aligned with crm ideas and ideology. The role of the hr department and the hr manager is very crucial for molding and developing the people in the organization to understand the *Corresponding Author

2 reasons, needs and requirements for bringing crm in the organization. Structural changes may become necessary to bring new values and work culture in the organization. 1.1 What is e-crm? It is possible to maintain customer relationships only by consistently implementing well proven customer bonding techniques like individualized customer care and communications, special consideration for high-value customers, rewards for customer value and loyalty, and customized products and services. However, with increase in the number of customers, it becomes difficult to implement these techniques. Growth necessitates the implementation of the best practices in customer relationship management with the use of sophisticated technology. This is possible only through proper dissemination of strategic, customer-focused decisions and information, better known as Electronic Customer Relationship Management (e-crm). In other words e-crm provides companies a means for conducting personalized, interactive and relevant communication with customers across both electronic and traditional channels. It focuses on understanding the effect of customer relationships on business. With the help of Information Technology (IT), electronic CRM concentrates on the management of all forms of relationships with customers. However, it has been wrongly interpreted by some that e-crm is an Internet-based CRM. Actually e-crm has a broader scope and focuses on the symbolic relationship of CRM strategy and the use of electronics for facilitation of the same. E-CRM integrates traditional CRM and e-business application. It makes possible for an organization to extend its infrastructure to customers and partners in ways that offer new opportunities of learning customer needs, gaining new economies, reaching new customers, adding values and doing these in real time while it might sound very simple, achieving effective e-crm is itself a stupendous task. Companies agree that e-crm is critical to their business, but unfortunately very few understand exactly what it is or how to evolve an e- CRM solution from their existing database marketing practices. 2. DIFFERENCE BETWEEN CRM AND E-CRM Crm is a business strategy for creating and sustaining long-term, profitable customer relationships. A business philosophy aligning company activities around customer needs is the starting point of a successful crm initiative. The ability of taking care of customers via the internet or the ability of customers to get customer care service online differentiates between crm and e-crm. Consider a local shopkeeper who knew his customers' names and birthdays. What is new is that, now the shopkeeper can use it to serve his customers on a much larger scale. This e-crm can be defined as activities for managing customer relationships with the use of the internet, web browsers or other electronic touch points. However, the challenge is to provide information on the right topic and at the right time that fits the customer's specific needs. Copyright 2012 Published by IJMRR. All rights reserved 2558

3 Major differences between CRM and e-crm Customer contacts CRM Contact with customer made through the retail store, phone, and fax. ecrm All of the traditional methods are used in addition to Internet, , wireless, and PDA technologies. System interface CRM Implements the use of ERP systems, emphasis is on the back-end. ecrm Geared more toward front end, which interacts with the back-end through use of ERP systems, data warehouses, and data marts. System overhead (client computers) CRM The client must download various applications to view the web-enabled applications. They would have to be rewritten for different platform. ecrm Does not have these requirements because the client uses the browser. Customization and personalization of information CRM Views differ based on the audience, and personalized views are not available. Individual personalization requires program changes. ecrm Personalized individual views based on purchase history and preferences. Individual has ability to customize view. System focus CRM System (created for internal use) designed based on job function and products. Web applications designed for a single department or business unit. ecrm System (created for external use) designed based on customer needs. Web application designed for enterprise-wide use. System maintenance and modification CRM More time involved in implementation and maintenance is more expensive because the system exists at different locations and on various servers. ecrm Reduction in time and cost. Implementation and maintenance can take place at one location and on one server. Different levels of e-crm In defining the scope of e-crm, three different levels can be distinguished: Foundational services: This includes the minimum necessary services such as web site effectiveness and responsiveness as well as order fulfilment. Customer-centered services: Copyright 2012 Published by IJMRR. All rights reserved 2559

4 These services include order tracking, product configuration and customization as well as security/trust. Value-added services: These are extra services such as online auctions and online training and education. Self-services are becoming increasingly important in CRM activities. The rise of the Internet and ecru has boosted the options for self-service activities. A critical success factor is the integration of such activities into traditional channels. An example was Ford s plan to sell cars directly to customers via its Web Site, which provoked an outcry among its dealers network. CRM activities are mainly of two different types. Reactive service is where the customer has a problem and contacts the company. Proactive service is where the manager has decided not to wait for the customer to contact the firm, but to be aggressive and contact the customer himself in order to establish a dialogue and solve problems. 3. STEPS TO ECRM SUCCESS Many factors play a part in ensuring that the implementation any level of ecrm is successful. One obvious way it could be measured is by the ability for the system to add value to the existing business. There are four suggested implementation steps that affect the viability of a project like this: 1. Developing customer-centric strategies 2. Redesigning workflow management systems 3. Re-engineering work processes 4. Supporting with the right technologies 4. E-CRM STRATEGY AND TECHNOLOGY To compete successfully in the present-day nigh-speed e-business market, e-crm systems must be built on top of a technology infrastructure addressing the requirements of the new Internet-driven businesses. Successful CRM implementation will lead to the customer service, sales and marketing people and everyone else in the organization to have a holistic view of each and every customer. This will help them in making quick and informed decisions, measuring marketing effectiveness, creating up-selling and cross-selling opportunities, and delivering personalized customer care. Not only the integration of information and customer touch points, an E-CRM strategy also includes the training and empowerment of employees and the automation of systems that help in customer interactions and communications. Customer relationship management is not the responsibility of die marketing department only. It is a corporate-wide practice that requires constant improvement on the company's ability of treating customers and prospects in ways that promote loyalty and continued business. The role of IT is of immense importance and die following functions are expected to be fulfilled through the use of IT: 4.1 Capturing data: Capturing the right data from identified sources is important for successful implementation of e-crm. The challenge in data capturing is that it should be in Copyright 2012 Published by IJMRR. All rights reserved 2560

5 diverse formats, for example, when a customer interacts with a bank, the following formats of data are generated by using multiple channels. Customer interactions through s ATM transactions Internet banking transactions Phone banking transactions Verbal and other written communications with the bank Therefore, it is quite obvious that the data sources could generate diverse formats of data. In the case mentioned above, the ATM transactions and die Internet banking transactions may be easily captured since they follow structured processes. On the other hand, and verbal transactions would generate data that may require voice recognition software to make the data recognizable to die system. The accuracy of data is very important for correct valuation and as such, data captured should be authentic and error free. 4.2 Assimilating data into databases: The data so captured above then needs to be incorporated into a database and assimilated. Therefore, databases having proper design and structure needs to be created as a part of the e-crm tool. The database so generated should fulfill the following criteria for successful implementation It should be robust and should enable transactions as and when desired by the users. It should be useable through standardization across all corporate data sources. It should direct application -specific analytical processes in order to target homogeneous customer segments. It should be able to collaborate data from all departmental steering committees for everything from data mart design to strategy development. It should be able to produce strategies for launching marketing campaigns that successfully integrate information, technology, and customer communications. Customer database should contain accurate, adequate, authentic and up-to-date data pertaining to the customers of the organization. Future projections for the organization need to be kept in mind while capturing and designing the formats. It should be able to support the number of users and manage the increased load, i.e., the database should be scalable and be able to cater to the growth in the business. The database should be compatible with the existing IT infrastructure as all CRM solutions are to be integrated with firm IT infrastructure like data warehousing, simply chain management solutions, etc. The database should be secure and the security of database should be ensured. Credit card operations, for example, are very sensitive and security of transactions is very important. Copyright 2012 Published by IJMRR. All rights reserved 2561

6 It is necessary to identify a connection between customer communication and the behavior of a specific customer (or prospect). At times, the information necessary for testing if a particular communication had any influence on the behavior of an individual customer is not fed into the data mail If for example, an individual customer is placed in a specific segment, that customer will receive a particular message or promotion campaign designed for that segment. Normally, customer behavior is tracked and associated with the particular message or promotion, providing the measurement required for evaluating the success of the promotion, targeting logic and customer segmentation. The process of targeting, communicating and evaluating is to be followed for effective delivery. A segment code may be presented to the customer and at the beginning he may be presented with a page of content designed specifically for that segment-however, based on the behavior of the customer during web sessions and the content delivery strategy for the website, the content presented to the customer may change. 4.3 Data Processing: after devising the crm strategy, a comprehensive list of desired outputs may be created. Some of the desired outputs that the system generates are as follows: Customer segmentation; Based on purchase behavior and demographic profile, segments of customers may be generated by the systems. These could be on the basis of product preference, price sensitivity, income, attitude, etc. Customer grievances: Based on customer complaints received from customers and supplemented with feedback from service personnel, the points of grievances of customers may be identified through data analysis. Customers perspective: An organization should view the interaction more from the customer s perspective and set the communication process specially suited to customer's own environment The users should be able to access the system whenever and wherever they desire. The outputs should be available in real time and with current data to ensure that they are of maximum use to the users. The executives in the field may be required to access the system using mobiles/laptops while working in the field. The system should therefore be able to generate the outputs on a 24/ 7 basis as well as offer the outputs in formats recognizable by all device users. 4.4 Methodology for e-synchronization: The methodologies for conducting the e-business initiatives need to be decided with careful consideration. The firm's strategic objectives at all times should be to decide at what point should the website be used meaning thereby whether it will be specific to attracting new customers, or help customers prior to purchase or coordinate order fulfillment and delivery etc. The focus of the company with regard to e- business should be very clear what role should the website play in the entire process? For the e-crm initiatives to succeed, the company needs to focus on the basic areas of delivery as mentioned below. Copyright 2012 Published by IJMRR. All rights reserved 2562

7 IT Service Providers: the e-crm system would require sophisticated hardware, networking and software with constant support from qualified technicians. As such, it is imperative to have system support offered by creditable and reputed agencies. Content Management; the e-crm system would require content for all interfaces with customers and these should be created keeping in mind the education level of the typical customer. Considering the case of our country where apart from hindi and english, vernacular languages also play important roles: here, it may be necessary to develop content in multiple languages. Call Centre Management: Apart from systems, customers may also require to directly interact with human service agents for conducting various transactions. Therefore, the company should set up a call centre to offer customers 24 X 7 immediate services. Employee Support: the success of customer relationship strategies can be greatly enhanced by employees who make contact with individual customers or prospects. E-crm helps a company to show a unified corporate front to a customer or prospect at every touch point and to apply a unified corporate strategy towards that customer. Consider, for example, a customer identified as having a high risk of defection and to be of high value. The customer would be offered some special privileges or sent a message to 'bond' the relationship, via direct mail or telemarketing. This approach can be highly effective as a proactive measure. However, the decision of treating such a customer in some unique manner should not be only through traditional direct marketing communications. For e-crm, this decision must be disseminated to other customer touch points, even those that are customer-initiated. Communication channels that can be leveraged include customer service representatives, sales representatives, collection departments, and other human touch points. These employees can be highly effective in implementing the crm strategy if they have knowledge of the corporate crm strategy and they are trained to handle different segments of customers or prospects, as well as have the information required to understand the types of customers or prospects they are interfacing with. This will bring down attrition rates, increase customer growth and improve acquisition of high-value customers. This undoubtedly will result in lighter corporate profitability. 5. EVALUATING SERVICE PROVIDERS OF CRM SOFTWARE CRM solutions are today widely available in the market with a host of vendors. Most CRM strategy management systems are available for specific components of the corporate customer communication landscape. Systems facilitating sales automation, customization and personalization of web content, marketing campaign management-collections, more intelligent operation of help desks and access to customer information in call centers are available, but it is a complicated task to get them to operate on one e-crm strategy by using the same source of customer information and decision process. Copyright 2012 Published by IJMRR. All rights reserved 2563

8 Several organizations are, however, making efforts to centralize customer information and make it accessible, use that information for a better understanding of the customer, and create the ability of making decisions that impact certain customer communications. The products offered by each one of them come with a host of functions and support services. To compare products offered by each provider is complex and difficult in the wake of the fact that each of them uses different terminologies to mean the same tiling. The older generation of CRM solution providers might have provided limited interactivity using only HTML as the standard; newer solutions might provide more interactive technologies like Java, CGI, ASP, etc. Under such circumstances, to compare the different products and solutions becomes a little difficult. Some of the functional and technical requirements of CRM solutions remain the same across all spheres. These are enumerated below. Business intelligence Analytical abilities Support for web-based functionality Centralized repository for both customer and other enterprise information Integrated workflow for business rules Integration with other ERP and enterprise-wide applications. Sales applications - Sales Force Automation (SEA) Marketing applications - Campaign Management (CMA) Customer Service and Support Applications (CSS) There is an exhaustive list of CRM solutions providers, but here are a few of them listed for your reference study. Siebel CRM on Demand ( Oracle CRM ( My Sap CRM ( People Soft (www. people soft.com) Microsoft CRM ( Onyx CRM ( Talisma ( 6. CURRENT STATUS OF E-CRM IN INDIAN BANKS Internet has enabled banking at the click of the mouse. At present there are five functional categories for online banking sites on line brochure center, interactive bank, s, calculations and cyberbanks, which offer customers access to account information, interbranch funds transfer and utility bill payments. Banks have tied up with service providers in telecom and power sectors like MTNL, BSES and cellular service providers for allowing their customers to make bill payments online. In India, new private sector banks like ICICI Copyright 2012 Published by IJMRR. All rights reserved 2564

9 Bank, HDFC Bank, Global Trust Bank and UTI Bank, have taken the lead in e-banking. Among the foreign banks, Citibank, has noticeable presence, while others like Federal Bank, HSBC Bank, Deutsche Bank and ABN Amro Bank, are moving towards becoming big players in e-banking. Even the state run banks like SBI and Union Bank of India have realised the advantages of such services. ICICI Bank, the first bank to offer e-banking services in India has more than one lakh regular internet user accounts, of which more than 25 percent are of NRIs. The bank has viewed advanced information technology as a managerial and competitive tool and has tried to harness technology to the maximum possible extent to deliver superior customer services. The Bank has emerged leader in B2B and B2C initiatives. B2B solutions (i-payments) aim at facilitating online supply-chain management to it corporate clients by linking them with their suppliers and dealers in a closed business loop. All members in this loop are required to maintain the account with the bank. This product has gained considerable market acceptance and the bank has already entered into memorandum of understanding with over 100 large Indian companies. The Bank became the first bank in India to introduce utility bill payment through Internet. Bank has entered into tie-ups with leading telecom companies such as MTNL, Tata teleservices, VSNL and cellular operators such as BPL Mobile, Airtel and Usha Martin. Tieups have been established with BEST & BSES for electricity payment in Mumbai. The bank with its net banking service called Infinity goes a step forward by allowing the account holder to transfer fund into another person s account with the bank. Also one can intimate about the loss of an ATM card over the net when using Infinity. Corporate sector can issue letter of credit and make inquiries regarding bills sent for collection via this service. It also provides facility for nicknaming all accounts to avoid remarking lengthy accounts number. UTI bank has tied up with Cosmat Max, to create a communication network for its customers. The network will have 50 VSAT terminals at strategic locations, which will help in ATM servicing and internal management information system. The bank has signed a memorandum of understanding with equitymaster.com for e-brokering activities of the site. This will enable the bank to leverage its database for e-commerce and other initiatives with data-warehousing and data-mining, where information of the customer spending habits will be used to sell other correlated products like credit cards. HDFC Bank has, for the first time in India made the e-shopping experience secure online and real time with the launch of its payment gateway. This will allow any visa/master credit card holder anywhere in the world to make payments for global services over the Internet. The bank has tied up with 15 portals and is in talk with several others to offer secure business to customer e-com transactions. The first secure, on-line and real-time e-com. credit card transaction in the country was done on the Easy.2 shoppe.com shopping mall, enabled by HDFC bank on a Visa card, heralding the launch of the payment gateway. HDFC Bank also offers a direct debit option whereby its customer can pay for the goods or services by a secure password enabled transfer of funds from their account to the merchant account. The state run public sector bank, the State Bank of India (SBI) made a quiet foray into net banking. The Copyright 2012 Published by IJMRR. All rights reserved 2565

10 country s largest commercial bank launched on-line SBI - an account browsing facility over the Net for customers in eight select branches including four NRI branches. 6.1 E-CRM Techniques used by Banks in India Banks leveraging technology can develop innovative customer solutions to attain growth with profitability within the framework of sound risk-management practices. Techno-savvy banks are tapping into online services to initiate a new era in relationship management to create one to one relationships as well as one to many relationships to enhance their competitive advantage. Recent developments in critical areas of IT have changed the way banks are managing their customer relationships. The following are some of the latest e-crm techniques used by banks in offering new products and services to its customers. 1. Internet banking: 2. Data Warehousing and Data Mining: 3. ATMs: 4. Telebanking or Mobile banking: 5. Computerized decision support system: Computer networking: 8. Customer smart cards: 7. CONCLUSION Customer acquisition is far most costly than customer retention and building intimate relationship with key customers helps the firm to take corrective action in designing ultimate products and services. As profits are drying up in the face of increased competition and customers are moving very fast from one firm to another therefore it becomes important to have integrated e-crm strategy across the whole organization. REFERENCES Ahuja V, Medury Y. Corporate blogs as e-crm tools: Building consumer engagement through content management. Journal of Database Marketing & Customer Strategy Management 2010; 17(2): Alavi et. al. An empirical approach to ECRM-increasing consumer trustworthiness using online product communities. Journal of Database Marketing & Customer Strategy Management 2011; 18: Godrej InfoTech Limited, e-crm Solution. Mittal RK, Kumra R. E- CRM in Banks: An Overview. Delhi Business Review 2001; 2(1): 1-6. Singh D, Agrawal DP. CRM practices in Indian industries. International Journal of Customer Relationship Management 2003; 5(3): Copyright 2012 Published by IJMRR. All rights reserved 2566

11 Ryals L, Payne AFT. Customer relationship management in financial services: Towards information-enabled relationship marketing. Journal of Strategic Marketing 2001; 9(1): Self Instructional Material, CRM and E- CRM. Copyright 2012 Published by IJMRR. All rights reserved 2567