biggest management challenge in the new millennium of liberalization and
globalization for a business is to serve and maintain good relationship with
the king – the customer. In the past producers took their customers
for granted, because at that time the customers were not demanding nor had
alternative source of supply or suppliers. But today there is a radical
transformation. The changing business environment is characterized by
economic liberalization, increasing competition, high consumer choice,
demanding customer, more emphasis on quality and value of purchase etc.
these changes have made today’s producer shift from traditional marketing to
modern marketing. Modern marketing calls for more than developing a product,
pricing it, promoting it and making it accessible to target customer. It
demands building trust, a binding force and value added relationship with
process of developing a cooperative and collaborative relationship between
the buyer and seller is called customer relationship management shortly
called CRM. According to Ashoka dutt head of Citi Bank “the idea of CRM is
to know the individual customer intimately, so that the company has a
customized product ready for him even before he asks for it.”
CRM is a new technique in marketing where the marketer tries to develop long
term relationship with the customers to develop them as life time customers.
CRM aims to make the customer climb up the ladder of loyalty.
company first tries to determine who are likely prospects i.e. the people
who have a strong potential interest in the product and ability to pay for
it. The company hopes to convert many of its qualified prospect into first
time customers and then to convert those first time customers into repeat
customers. Then the company tries to convert these repeat customers into
clients – they are those people who buy only from the company in the
relevant product categories. The next challenge for the company is to
convert these client into advocates. Advocates are those clients who praise
the company and encourage others to buy from it.
ultimate challenge is to convert these advocates into partners where the
customers and the clients work actively together to discover ways of getting
in CRM the key performance figure is not just current market share but share
of life time value by converting customers into partners.
the company tries to identify that small percentage (20%) of key account
holders who’s contribution to the company revenues is high (80%). So from
this point of view, CRM is also known as KEY ACCOUNT MANAGEMENT.
A satisfied customer in 10 years will bring
100 more customers to the company.
It costs 7 time more to attract a new
customer than to serve an old one.
20% of the company’s loyal customers account
for 80% of its revenues. (Pareto’s principle).
The chances of selling to an existing
customer are 1 in 2, the chances of selling to a new customer are 1 in 16.
ways to keep customers for life
Every part of the company’s marketing
effort should be geared towards building lifetime relationships.
People want to do business with
friendly people. To have effective relations a friendly attitude must
permeate in the organization.
Information technology developments
should be positively used to serve the customers.
The company should always be flexible
to bend its rules and procedures in the client’s favor.
The company should communicate with
its customers even when it is not trying to sell something.
The company can communicate and
develop stronger customer bonding by providing financial and social
The company should try to know all its
customers including their lifestyles, hobbies, likes and dislikes etc.
The company should make it a point to
deliver more than what is promised.
textile industry one company sell its product to another company. For
example a yarn manufacturing company sell to fabric manufacturing company. A
fabric manufacturing company sell fabric to apparel company. The main
customers of the companies in the textile industry are the wholesalers. And
the final product is sold to the wholesalers and retailers. In this industry
the customers are few and profit margins are high. So CRM is very much
necessary and relevant in this industry. There is a high degree of
uncertainty on the part of the buyers, the likelihood of customers seeking a
relationship is increased. If the firm loses its customer it would be major
loss to the firm. The product in the textile industry is complex and quality
is an important factor. One of the major values the customer expects from
vendors is quality. No customer will tolerate average quality. According to
GE’s chairman John “quality is the best assurance of customer allegiance and
strongest defense against competition and the only path to sustained growth
and earnings.” If the product is not of good quality the customer will not
be satisfied and the firm may lose its customer. Moreover there is a scope
of customization in the product. The seller has to customize the product
according to the need of the customer. Customization is changing the product
according to the need of the customer in order to satisfy him.
There are four
key steps for putting one to one marketing program to work –
: Identify your customers
launch a one to one initiative the company must be able to locate and
contact a fair number of customers or at least a substantial portion of its
valuable customers. It is crucial to know the customer details as much as
possible, not just their names or address, but their habits, preferences and
: Differentiating your customers
Customers are different in two principal ways, they represent different
levels of value and have different needs. Once the company identifies its
customers differentiating them will help the company to focus its efforts to
gain the most advantage with the most valuable customers.
: Interacting with the customer
Interaction is also a crucial component of a successful CRM initiative. It
is important to remember that interaction just not occur through marketing
and sales channels, customer interact in many different ways with many
different areas of the organization so to foster relationship all the areas
of the organization must be accessible to the customer.
: Customize your enterprise’s behavior
Ultimately to lock a customer into a relationship a company must adapt some
aspect of its behavior to meet customer’s individually expressed needs this
might mean mass customizing a manufactured product or it might involve
tailoring some aspect of the service surrounding the product.
Significance of the study
CRM (customer relationship management) is an integrated effort to strengthen
the network of relationship for the mutual benefit of both the parties. The
biggest management challenge in the new millenium of liberalization and
globalization for a business is to maintain good relationship with the
king – the customer. This study is of great significance because
A 5% increase in the customer retention will
increase the profit up to 125%.
It costs seven time more to attract a new
customer than to serve an old one.
20% of the company’s loyal customers account
for the 80% of its revenues.
To study on customer relationship management
would enable the researcher to know about the CRM practices adopted in the
of the existing literature
the available literature we can summarize CRM in the words of various
authors as follows-
According to Shani and Chalarani – Customer Relationship Management marketing can be defined as
“ an integrated effort to identify, maintain and build up a network with the
individual customers and to continuously strengthen the network for the
mutual benefit of both parties, through interactive, individualized and
value added contracts over a long period of time.
words of Lekha “ CRM aims at delivering better products and value to the
customers through better understanding of his needs.”
in textile industry has to maintain good relations with its customers. They
have to retain the customers for a long time to avail the benefit of their
relations. The customer relationship management is one of the effective tool
to identify, establish and maintain relationship with the customers. With
the help of this research we are going to identify the importance of CRM in
of the problem
textile industry is basically manufacturing based industry. Through this
study we are going to identify the importance of CRM in the textile
industry. How it is benefited from CRM? Is their any relevance of
implementing CRM? And what role does information technology can play in CRM?
To study the current practices of CRM.
To find out the impact of CRM on the
profitability of the organization.
To study the factors affecting the CRM
To study the role of information
technology in CRM.
research design is simply a plan for study in collecting and analyzing the
data. It helps the researcher to conduct the study in an economical method
and relevant to the problem.
Research methodology is a systematic way to solve a research problem. The
methodology should combine economy with efficiency.
study conducted here is exploratory cum descriptive.
of the study
scope of the study is confined to Company ___________.
Collection of the data
are two types of data.
– primary data is that data which is collected for the first time. These
data are basically observed and collected by the researcher for the first
time. I have used primary data for my project work.
– secondary data are those data which are primarily collected by the other
person for his own purpose and now we use these for our purpose secondly.
is collected through schedule.
The customers of
COMPANY are the wholesalers throughout India. COMPANY also export the fabric
to countries like Egypt and U.A.E.
The needs of the customers are clearly
defined and the products are customized according to the needs of the
comments and complaints are welcomed and resolved quickly and positively.
Comments and complaints are taken through face to face interviews.
The company conducts customer satisfaction
surveys through research agencies.
The company provides credit facility to its
customers up to 90 days. If the customers pay within 7 days they are given
4% cash discount.
persons of the company maintain frequent and informative communication with
process is regularly reviewed to eliminate non value-adding activities.
average sale per customer has increased by 15% and customer’s response to
the marketing activities is also improving. Customer retention is also
factors which have an impact on the CRM are – organization culture, support
from top management, interpersonal skill of the sales personals and working
environment of the company.
customers of the COMPANY are the wholesalers. It is because the number of
retailers is very large as compared to the wholesalers. So it is not
possible for the company to approach to the retailers. Therefore the company
sells to the wholesalers and then wholesalers sell to the retailers.
Customers are encouraged to give suggestions and complaints so that the
company can improve its working and services. If the customer’s complaints
are not resolved the customers will be dissatisfied and the company may lose
Different customers have different requirements. So the company customize
its product accordingly to satisfy the customers. It also gives more choice
to the customers.
the information about the customers and to measure the satisfaction the
company conducts surveys. Because of the expertise needed in the research
the company give this work to research agencies like AC NILSON.
company gives credit facility to its customers to increase the sales volume.
If the company do not sell on credit the customers may switch over to other
company maintains frequent communication with the customers. As soon as the
product is ready or a new product is launched the information is provided to
the customers. Communication is also necessary to maintain the interest of
the customers in the company.
company gives concession to its regular customers so as to retain its most
valuable and profitable customers.
company regularly reviews the business process in order to eliminate non
value-adding activities, to reduce the cost and to make the whole work
efficient and effective. If the internal customers are not satisfied and
there is lack of coordination among the departments then it will affect the
external customers also.
this study it can be concluded that the customer relationship management in
Company is satisfactory. The company is using various CRM practices like
customization of the product, maintaining interaction with the customers
regularly and providing good quality product etc. Customer relationship
management has a certain impact on the profitability of the company. Average
sale per customer has increased 15% over the last two years. Customer
response rate towards marketing activities is also improving. There are
various factors affecting the customer relationship management like working
environment of the company, support from top management and coordination
among the departments of the company. Information technology is not used as
much as it should be. The company is using traditional tools of CRM like
quantitative research, personal interviews. The company should modern tools
like data mining, contact center, e-CRM and web based survey tools.
Time constraint is unavoidable
limitation of my study.
Financial problem is also there in
completing this project in a proper way.
As no work has been done earlier in
this regard so scarcity of secondary data is also there.
Inadequate disclosure of information
is also the problem.
There should be more and more emphasis given by the company for satisfying
the customer up to a apex limit and by providing the utility of every
penny of his money.
There should be more use of information technology.
company should be flexible to bend its rules and procedures in the clients
company can communicate and develop stronger customer bonding by providing
social and financial benefits.
Who are your customers?
Are your customer’s needs clearly
Do you conduct customer satisfaction
Do you communicate results of your
customer satisfaction surveys regularly throughout the company?
Do you actively seek out customer
comments and complaints?
How do you get customer comments
Face to face interview.
Toll free numbers, formal surveys.
How do you get information about
Face to face interviews
Any other means.
Do you analyze channel effectiveness?
ie which channel is most effective in serving the customer?
Do you provide credit facility to your
Do you give concessions to your
Do you take feedback from your
Do you customize your product or
services according to the customer?
Do you have a concept of “internal
Do you communicate with your customers
Do you regularly review the business
process to eliminate non value- adding activities and improve customer
Is the working environment is
conducive to the well-being and morale of all employees?
How much is the role of computers in
serving the customers?
Plays a big role
Not much role to play
No role to play.
Do you have centralized database for
No such database.
Does the staff have access to the
Is there commitment from top
management to support the customer-focused service concept?
Is there any improvement in average
sale per customer?
Is there any improvement in customer
response rate to the marketing activities?
Is there any improvement in customer
retention and loyalty?
This is Project Report on Customer Relationship Management [CRM]