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1. Explain the CRM essentials
CRM programs involve three basic business processes:
1. Marketing Automation
2. Sales Force Automation
3. Customer Service
Each of these areas is based on many specific CRM capabilities.
Marketing, for example, includes capabilities such as ‘measuring marketing effectiveness’ and ‘executing effective marketing plan’.
Sales include ‘developing and executing an effective channel strategy’ and ‘measuring sales effectiveness’.
Service includes ‘understand customer profitability and cost to serve’ and ‘developing differentiated/tiered customer service’.
1. Marketing Automation:
Marketing Automation is based on the premise, in addition to all phases of campaign management; many core-marketing functions can be improved through increased automation. It focuses on analyzing and automating marketing processes.
Overall, MA can be divided into three areas:
a. High-end campaign management
b. Web-driven campaign execution
c. Marketing-oriented analysis
MA encompasses lead management, campaign execution and marketing collateral management.
2. Sales Force Automation
Sales Force Automation (SFA) is the fastest-growing CRM segment, with critical functions including lead/account management, contact management, quote management, marketing encyclopedia, forecasting, win/loss analysis and sales administration.
The sales functions have proven to be the most difficult process to automate. Sales departments typically operate with a degree of autonomy and are often resistant to externally mandated change. The following components of the Sales process the organization must analyze and re-engineer as part of every SFA initiative: Lead generation and tracking, Field sales, etc.
3. Customer Service
The customer service area presents the industry with some of its most tempering opportunities for achieving breakthrough differentiation and competitive advantage. Customer services focuses primarily on post sales activities, though some presale information functions are also present. Customer service and support includes the following: Field service and dispatch technicians, internet based service or self-service via a web site, call centers that handle all channels of customer contact, not just voice.
2. Explain the Five elements, which are required to Implement a CRM program effectively
The five elements that are required to implement a CRM program are:
a. Strategy
b. Segmentation
c. Technology
d. Process
e. Organization
a. Strategy:
Six type of strategy affect a CRM program: channel, segmentation, pricing, marketing, branding and adverting, and of these the first three – channel, pricing and segmentation – have the greatest impact. Segmentation will determine how clients and ultimately the marketing organization will be structured. Pricing strategy is the single greatest differentiator in a commoditized market and will determine more than half the value of the offer. Channel strategy determines how the offer will be conveyed to the customer.
b. Segmentation
Historically, segmentation focused on a particular product or market, but more
Recently, organizations have used it to consider the value of the customers of their businesses. And today, some organizations are adopting the third generation outlook of segmentation – categorizing and marketing to customers according to customer’s needs.
To use segmentation effectively, organizations need to develop the straight set of formulas (algorithm) for modeling the behavi9our of customers. Algorithms needs to be properly tested to ensure that prospects are appropriately categorized.
c. Technology
The CRM process depends on data. Concentrating on a single, operations focused, integrated logical database in the most important technical consideration. Other essential elements to consider are the software for the database, data mining and decision support and campaign management tools, as well as call center software and hardware. Hardware databases and decision support software are in use within the communications industry but campaign management, call center and data mining tools are less well known.
The biggest technology problem for many organizations is the set up of their databases. Most organizations configure their databases to support data warehousing functions, rendering them incapable of scaling up to support the order entry or billing process. Still more organizations create multiple separate databases to support data mining, campaign management and call centers. The process is not only time consuming and expensive, but it is often difficult to reconcile as well.
d. Process
Identifying the process that need to be involved in implementing CRM is not inherently difficult. The difficulty lies in gaining organizational buy in, developing measurements to assess the effectiveness of mew processes and implementing technology to support and enforce its use. The CRM process is the order and method by which the direct marketing activities are executed. It is not overly complicated, but it does emphasize speed to market. As a consequence, process re-engineering efforts concentrate on minimizing the time it takes to execute a particular marketing activity and reducing the interdependencies, if not the total number of marketing tasks.
e. Organization
Organizational structure is often the most overlooked component of a CRM implementation. As discussed above, most organizations marketing is media based. Consequently, making a tradition to direct marketing is difficult, especially when it coincides with introduction of needs based segmentation. Creating cross disciple segment teams is effective if they are formed for the purpose of learning and executing new styles of campaigns. Each segment team should take turns working through the four categories of campaigns – win back or save, prospecting, loyalty and cross selling/up selling.
3. Explain the barriers of e-Business in
The barriers of e-business in
1. Internet Uses
If computer uses itself is insignificant, internet uses is almost non-existent. The largest ISP, VSNL, has about two and a half lakh subscriber. All the other ISPs put together may add an equal number. The e-commerce happens over the internet and with low internet usage it is difficult.
2. Bandwidth
The lack of bandwidth is a major cause for concern. Currently all international connectivity is through VSNL and is limited to a very slow speed of 165 megabits per second. But there have been several applications with the DoT by small ISPs to set up their own gateways, which would definitely mean the introduction of newer and faster technologies.
3. Cyber laws
People have had problems of non-delivery of orders placed on Rediff on the net. And it takes only one scam to shake the confidence from the system. Legal shelter is extremely imperative for the confidence to build up. Then there is issue to insurance against fraud. Whether the centralized insurance agencies, which are opposed to the very idea of privatization will provide low premium insurance cover to a high risk, totally intangible based area like transaction indemnity anytime soon is anybody’s guess. The lack of secure online payment mechanism and the continued debate on passing the Digital Signature Act are all major stumbling blocks.
4. Digital Identity
How can you trust the site you are doing business with? Similarly, how does the site ensure that you are not using the stolen credit card number? The answer to this is digital certificate. But to issue a digital certificate, you need an extremely trustworthy agency issuing the certificate of identity.
5. Inter-state goods movement regulations
Any one involved in selling and shipping goods across the state borders will testify what a nightmare this can be. No two states have the same sales tax and excise-duty rules. The rates differ; the forms to be filled in differ. And then there is octroi.
6. Setup and Infrastructure costs
E-commerce is not a one-man operation that can run from a couple of servers stashed away in a corner in a basement. Equally big is the cost of software, web-hosting services, bandwidth and proper security. Add these could add up to quite a big amount, both in initial investment and in running cost. Though an industry progress, several companies that offer specialized services have come into existence.
7. Advertising cost
The internet is often linked to a high speed digital highway with millions passing by every minute. People come to a web site either by typing the URL directly in their browser, or by clicking on an interesting link seen on other site. Either of these costs a lot of money. Again in the case of business-to-business sites, this may not be a major factor. All these are applicable to business-to-business e-commerce.
4. Briefly explain the Five Engines of e-CRM
The five engines of e-CRM are:
- Customer Centric Information Store
- The Analysis and segmentation engine
- The Personalization Engine
- The Broadcast Engine
- The Transaction Engine
1. Customer Centric Information Store
e-CRM initiatives depend on a 360-degree customer view. A Customer Centric Information Store’ integrates data from disparate information sources such as web sites, transactional systems, call centers, etc. This engine enables companies to recognize and respond accurately to customers, whether they purchase products through a physical store or browse a web site. Consequences of an incomplete customer view are often harsh.
2. The Analysis and segmentation engine
Building trusted customer relationships depends on accurate customer segmentation. The analysis and segmentation engine performs business analysis, segmentation and prediction so that customer intractions take place in an appropriate and personalized manner. Without this engine, eCRM lacks the intelligence to be effective – even if it has massive volumes of customer –centric information.
3. The Personalization Engine
The Personalization Engine makes it possible to personalize products and serves for customer in a cost-effective manner, by lowering the material cost of personalization. Most companies provide personalized attention to a small group of clients who are “worth it”.
4. The Broadcast Engine
The Broadcast Engine enables continuous customer interaction and value exchange
require 24/7 access to customers. While the web is becoming increasingly pervasive, few customers are on line all day. A recent
5. The Transaction Engine
An effective The Transaction Engine promotes information exchange between every customer and the enterprise. Like a small town shopkeeper who often conversed with his customers, the Transaction Engine maintains customer contact and transmits information to the customer centric information store for later use.
6. Write short note on Volume/ Variety Matrix
Ans:
To better understand the competitive position of an enterprise, the relationship between the volume produced by the company is compared to the variety produced. An interesting diagonal has evolved where most companies are clustered in order to compete effectively. Movements from that competitive diagonal can either be a competitive advantage for the company or disaster. According to Terry Hill in Manufacturing Strategy, this can be represented in the following matrix. This relationship shows an inverse relationship between variety and volume. In general, as the product volume increase the variety tends to decrease.
| ^ 1
| |
| Variety 2
| 3
|
| Volume ---> 4
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