tions, CRM is characterised by the IT enabled integration of customer data from

Question

tions, CRM is characterised by the IT enabled integration of customer data from multiple niaable proposition. In all but the smallest of organisa- sources." Case Example 4.4 demonstrates that CRM demands much more than the introduc tion of an IT system, but also demands significant changes in the way the company operates. Not least, CRM requires the commitment of customer-facing staff to think behind the raw data from IT systems to apply insight to each customer transaction. Case Example 4.4 Travelco Ltd Moira Clark, Director of the Henley Centre for Customer Management Travelco is a large UK package holiday company that has experienced difficult times since September 11th, SARS, the Irag War and the economic recession. Travelco's customer retention rate was around 20 per cent annually and its market was declining by 10 per cent annually. As a result of this the company had focused predominantly on a sales-led strategy and very little attention had been devoted to customer rela- tionship management (CRM). However, this changed with the implementation of a comprehensive CRM strategy The company began with a thorough audit of its state of readiness for CRM. This included an assessment of its market- ing strategy conditions, its culture and climate conditions and its IT system conditions (see Figure 4.4). These conditions are Source defined as follows: Marketing strategy. This is the set of management decisions concerning the definition and selection of target customers and the value propositions made for them. C target markets are homogeneous, distinct segments and the propositions are segment-specific. Culture and climate. The values of organisational culture must be aligned to the marketplace and be commonly held throughout the company, yet still remain flexible. Without t hinder CRM progress. Similarly, the best CRM systems will fail if the organisational climate, that is the practices, procedures and rewards of the company, are not aligned to the organisation culture. In these circumstances tension will occur and a negative climate will lead to failures in CRM T systems. In effective CRM companies these include not just the software and hardware systems RM will only work in situations where the these attributes, culture will they also include organisational structures and systems that support the IT process, such as internal intranets. also all data and information processes connected to customer contact and proposition delivery

Explanation / Answer

1. Following were the risks in adoptation of CRM at Travelco.

(a) The data collected with great efforts could have been wasted if it was not analysed properly to find meaningful customer insights. The execution part also involved significant risk if it could not find the value propostion for the customer segments thus formed.

(b) The organisational culture, if not aligned to customers and service focus , could have made the entire exercise futile because the culture of sales dominance would not have left any room for CRM which did not offer any tangible rewards to the workers.

(c) The readiness of IT department was another risk, as the plans which looked very good on paper could have backfired in absence of adequate IT infrastructure and support to bring them into execution.

2. The approach was successful as the company immediately recognised the needs and pre requisites for successful implementation of its CRM. It changed its marketng strategy towards identification of potential customer segments, identifying their needs and formulating precise value propostion for every segment. The organisational culture was aligned to meet the customer goals and employees adopted customer centric strategies from sales centric approach which was followed previously. The new changes enabled it to know the customers better, address to their issues in a better way and giving every customer what he/she actually wanted, in order to build a mutually beneficial relationship based on trust.

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