2. Customer Focus
Customer Focus was identified as the single most
important differentiator between the best and the
worst companies in an industry in a survey of 100+
senior executives.
(Schmitt, 2003)
(c) Kalpana Chauhan

3. Customer Relationship Management
CRM is a management approach that involves identifying,
attracting, developing and maintaining successful customer
relation over time in order to increase retention of profitable
customers. (Bradshaw and Brash 2001, Massey et al 2002)
Requires alignment of business strategy, organization (relational)
structure and processes, customer knowledge and technology in
such a manner, that all customer interactions can be organized to
the unique positive customer experience resulting value for the
organization. At its highest use, it is a competitive strategy.
(c) Kalpana Chauhan

4. CRM Focus
0 Strategic marketing related processes and capabilities.
(Day 1994,99,2000, 2003)
0 KM and interaction process (Zablah et al, 2004)
0 Customer loyalty, profitability, acquisition ,retention
(Kumar & Shah, 1999; Reinartz & Kumar, 2003; Venkatesan,
Dick & Basu, 2003; Stauss et al, 2004)
0 Organizational culture, focused on creating quality
(profitable) relationships
(Ngai, 2005; Romano & Fjermestad, 2003)
0 A technology providing integrated view of customers
(Zikmund, McLeod, & Gilbert, 2003)
(c) Kalpana Chauhan

5. CRM as Differentiation Strategy
0 Strategy is based on a differentiated customer value
proposition. Satisfying customers is the source of
sustainable value creation.
(Kaplan, 2004)
0 The value paradigm requires integration and real time
optimization of the value chain between the customer,
the firm and its extended enterprise. (Chan, 2005)
(c) Kalpana Chauhan

6. Proposed Conceptualization
0 CRM as differentiation strategy could be
conceptualized in terms of three components:
0 Customer Experience as a driver
0 Customer Centricity as a design
0 Relationship Management as a process
(c) Kalpana Chauhan

7. Customer Experience Facts
0 86% of consumers quit doing business with companies because
of a bad customer experience.
(Harris Interactive, CEI Report, 2010)
0 It takes 12 positive service experience to make up for one
negative experience. (Ruby Newell-Legner)
0 80% of the firms like to use customer experience as a form of
differentiator. (Forrester: State of customer experience 2010)
(c) Kalpana Chauhan

8. Customer Experience
At this very moment, it is happening. Across channels and touch points,
customers are experiencing every company. Whether interacting on the
Web, through a call center, on the phone, by way of e-mail or face-to-face,
customers are experientially assessing the extent to which a company
values their patronage. Those experiences are collectively serving to
strengthen relationships—or, if the company is failing to fulfill its brand
promise and to delight customers, are instead weakening the bond between
its customers and its business. (Peppers and Rogers 2009)
(c) Kalpana Chauhan

9. Literature
Focus has been mainly on service quality and measuring customer
satisfaction
Consumption’s experiential aspects (Holbrook and Hirschmann 1982)
Experience Economy (Pine and Gilmore 1999)
experiential marketing, Customer Experience (Schmitt 1999, 2003)
Meaning, creation strategy Meyers and Schwager, 2007, Verhoef
2007
Atmosphere Baker et al. (2002); Kaltcheva and Weitz (2006);
Wakefield and Baker (1998)
Price Baker et al. (2002); Dorotic, Verhoef, and Bijmolt (2008);
Gauri, Sudhir and Talukdar (2008); Noble and Phillips (2004);
Assortment Baker et al. (2002); Broniarczyk, Hoyer and McAllister
(1998); Huffman and Kahn (1998); Janakiraman, Meyer, and Morales
(2006)
Channel Neslin et al. (2006); Patricio, Fisk, and Falcao e Cunha
(2008); Sousa and Voss (2006); Verhoef, Neslin, and Vroomen (2007)
(c) Kalpana Chauhan

10. What is Customer Experience Management?
Customer’s interpretation of his or her total interaction with the brand
(Ghose 2007)
As such, a service provider cannot avoid creating an experience every time it
interacts with a customer (Thompson and Kolsky 2004)
The process of strategically managing a customer's entire experience with a
product or company (Schmitt 2003)
All interactions involved throughout the process and throughout the customer
lifecycle culminate in a positive customer experience if customers go away
feeling that their personal needs were met and they were treated with care.
(c) Kalpana Chauhan

11. What is Customer Experience Management?
0 Customer experience is the internal and subjective
response customers have to any direct or indirect contact
with a company. (Meyer & Schwager, 2007)
-Direct contact: generally occurs in the course of purchase,
use, and service and is usually initiated by the customer.
-Indirect contact: most often involves unplanned
encounters with representations of a company’s products,
services, or brands and takes the form of word-of-mouth
recommendations or criticisms, advertising, news reports,
reviews, and so forth.
(c) Kalpana Chauhan

12. Customer Experience
0 Requires Outside-in approach
0 Can be seen from the traditional information-
processing and decision oriented perspective and the
experiential perspective.
(c) Kalpana Chauhan

13. Customer Centricity as Design
0 Amongst all CRM failure only 6% are due to
technology, remaining are due to failure to change
behavior, culture or organizational structure.
(Richard 2008)
(c) Kalpana Chauhan

14. Customer Centricity
0 ‘Putting customer as the center of business and activities’.
0 It refers to the orientation of a company to the needs and
behaviors of its customers, rather than internal drivers (such
as the quest for short term profit).
0 Requires alignment of operating model behind a carefully
defined customer segmentation strategy and tailor business
streams- product development, demand generation, customer
care, supply chain etc.
(Gummesson 2008)
(c) Kalpana Chauhan

15. Dimensions of Customer Centric Organization
Dimensions Customer centric organization
Basic philosophy Serve customers: all decisions start with the
customer and opportunities for advantage
Business orientation Relationship-oriented
Product positioning Customer segment centers, customer relationship
managers, customer segment sales team, e.g. high
net worth
Organizational Highlight product benefits in terms of meeting
structure individual customer needs
Organizational Focus Externally focused, customer relationship
development, profitability through customer
loyalty, employees are customer advocates
Performance metrics Share of customer wallet, customer satisfaction,
customer lifetime value, customer equity
Management criteria Portfolio of customers
Selling approach How many products can we sell to this customer?
How do we co-create value?
Customer Knowledge Customer knowledge creates a valuable asset
(c) Kalpana Chauhan
Shah et al 2006

16. Customer Centricity
1.Solve the customer’s problem completely by ensuring
that all the goods and services work, and work
together.
2. Don’t waste the customer’s time.
3. Provide exactly what the customer wants.
4. Provide what’s wanted exactly where it’s wanted.
5. Provide what’s wanted where it’s wanted exactly
when it’s wanted.
6. Continually aggregate solutions to reduce the
customer’s time and hassle.
(Womack and Daniel 2005)
(c) Kalpana Chauhan

17. Relationship Management as Process
What is RM process?
0 Customer relationship management as a core organizational
process focuses on various activities that an organization
perform in establishing, maintaining, and enhancing long-
term associations with customers.
(Berry 1995; Morgan and Hunt 1994; Srivastava, Shervani,
and Fahey 1999)
0 This major relationship management processes are the
marketing communication, interaction and customer’s
perception of value leading to relationship dialogues.
(Gronroos, 2004)
(c) Kalpana Chauhan

18. Relationship Management as Process
Why RM processes?
0 To derive strategic potential of relationships and pursue
them as a differentiation strategy companies need to build
relationship management capability. Capabilities are rooted
in business processes and encompasses the value chain.
(Leonard-Barton, D. 1992)
(c) Kalpana Chauhan

19. Levels of CRM process
Relationship Management as process need to be dealt at-
0 Macro level- process of building relationships with
customers and include sub-processes like prospect
identification, customer knowledge creation etc.
(Srivastava et al 1999, Plakoyinnaki andd Tzokas 2002
Reinartz et al 2003)
0 Micro level- process to manage all customer interactions
( Day and Van den Bulte 2002, Kohli 2003, Holmlund
2004, Gronroos 2004)
(c) Kalpana Chauhan

20. Levels of CRM Process
There are three different possible levels:
(1) functional,
(2) customer facing, and
(3) companywide.
CRM process entails the systematic and proactive
management of relationships as they move from beginning
(initiation) to end (termination), with execution across the
various customer-facing contact channels.
(c) Kalpana Chauhan

21. Customer Relationships as
Differentiation Strategy
• Define the customer experience that customers value and
Design the services (CE)
CE
• Engaging the employees
• Alignment of all touch-points
CC
• Strategy development process
• Multichannel integration process
• Customer Information Management on ongoing basis
RM-P (process)
(c) Kalpana Chauhan

22. Thanks
Kalpana Chauhan
Fortune Institute of International Business
New Delhi
kalpana.chauhan@fiib.edu.in
(c) Kalpana Chauhan