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CRM Notes

The document covers various aspects of Customer Relationship Management (CRM), including its definition, benefits, and the importance of effective communication in customer interactions. It also discusses concepts such as public relations, quality circles, market segmentation, and the role of data warehousing in CRM. Additionally, it highlights the significance of customer retention strategies and the relationship between bankers and customers.

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0% found this document useful (0 votes)
9 views12 pages

CRM Notes

The document covers various aspects of Customer Relationship Management (CRM), including its definition, benefits, and the importance of effective communication in customer interactions. It also discusses concepts such as public relations, quality circles, market segmentation, and the role of data warehousing in CRM. Additionally, it highlights the significance of customer retention strategies and the relationship between bankers and customers.

Uploaded by

dharshanajain22
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CUSTOMER RELATIONSHIP MANAGEMENT

SECTION – A

1. Listening:
The listening process involves five stages: receiving, understanding, evaluating, remembering, and
responding. Active listening is a particular communication technique that requires the listener to provide
feedback on what he or she hears to the speaker.

2. CRM:
Customer relationship management (CRM) is the combination of practices, strategies and
technologies that companies use to manage and analyze customer interactions and data throughout the
customer lifecycle, with the goal of improving customer service relationships and assisting in customer
retention and driving sales.

3. Public relations:
Public relation is a management function that establishes and maintains two-way, mutual relationships
and communications between an organization and its publics and stakeholders (i.e. those who have a
stake, such as employees, shareholders, etc.) that often determine their success or failure.

4. Quality circle:
A quality circle is a participatory management technique that enlists the help of employees in solving
problems related to their own jobs. Circles are formed by a group of workers who do the same or
similar work, who meet regularly to identify, analyze and solve work-related problems.

5. Customer of a bank:
Customer of a bank is any person utilizing one or more of the services provided by the bank. He may
hold any simple checking transactions, deposits of current or savings account.

6. Define the term communication.


According to Newman and Summer,” communication is an exchange of facts, ideas , opinion or emotion
by two or more person .

7. How to write a business letter?


Business letter may be defined as a media or means through which views are expressed and ideas or
information is communicated in writing in the process of business activities.

8. What is CRM?
Customer relationship management (CRM) is a term that refers to practices, strategies and technologies
that companies use to manage and analyze customer interactions and data throughout the customer
lifecycle, with the goal of improving customer service relationships and assisting in customer retention
and driving sales growth.

9. What do you mean by listening?


Listening is a process of receiving, interpreting and reacting to the message received from the
communication sender.

10. Define the term public relation.


Public relation is an expensive process of communication to establish and continue the constructive
relation between the organization and its stakeholders or society.
11. Define customer retention.
Customer retention refers to the activities and actions companies and organization take to reduce the
number of customer defections. The goal of customer retention program is to help companies retain as
many customers as possible, often through customer loyalty and brand loyalty initiatives.

12. Give the meaning of quality circle.


A quality circle has its own guidelines, picks up the issues which are not of personal nature and comes
up with the suggestion for resolving them. Thus it can be said that, it does what it is supposed to do
instead of doing something which is imposed on it by the external environment.

13. State the method of resolving grievance.


1. Individual grievance
2. Group grievance
3. Policy or union grievance.

14. Give two recommendations of goiporia committee.


1. Service at the customers
2. Guidance to customer
3. Deposit and other accounts
4. Uninterrupted service

15. Mention the various sources of data collection.


1. Customer database
2. Prospect database
3. Cluster database
4. Enhancement database
5. Business database.

16. What is customer database?


A customer database is the collection of information that is gathered from each person. The database
may include contact information, like the person’s name, address, phone number, and e-mail address.
The database may also include past purchases and future needs.

17. What is market segmentation?


Market segmentation means division of market into smaller group having similar needs and qualities.
This helps the company to modify the products or services to suit the different group more effectively.

18. What is non-verbal communication?


Nonverbal communication is the process of sending and receiving messages without using words, either
spoken or written. Similar to the way that italicizing emphasizes written language, a nonverbal behavior
may emphasize parts of a verbal message.

19. Give some examples of written communication.


Email, Internet websites, Letters, Proposals, Telegrams, Faxes

20. List out the tips for good listening.


1. Listen attentively
2. Create a positive listening environment
3. Use feed back
4. Fight off distractions
21. What is the concept of CRM?
Customer relationship management (CRM) is a term that refers to practices, strategies and technologies
that companies use to manage and analyze customer interactions and data throughout the customer
lifecycle, with the goal of improving customer service relationships and assisting in customer retention
and driving sales growth.

22. Define the term banker


A banker is the one who conducts the business of banking; one who, individually, or as a member of a
company, keeps an establishment for the deposit or loan of money, or for traffic in money, bills of
exchange, etc.

23. Define customer of the bank


A customer is someone who has an account with a bank or who is in such a relationship with the bank
that the relationship of a banker and customer exist. The legal position implies that opening an account
is the crucial element in establishing the banker-customer relationship.

24. Define the term ombudsman


An ombudsman, ombudsperson, ombud, or public advocate is an official who is charged with
representing the interests of the public by investigating and addressing complaints of maladministration
or a violation of rights. The ombudsman is usually appointed by the government or by parliament, but
with a significant degree of independence. In some countries an inspector general, citizen advocate or
other official may have duties similar to those of a national ombudsman, and may also be appointed by a
legislature.

25. Write a short note on COPRA forum.


Consumer Protection Act, 1986 is an Act of the Parliament of India enacted in 1986 to protect the
interests of consumers in India. It makes provision for the establishment of consumer councils and other
authorities for the settlement of consumers' disputes and for matters connected therewith also. The act
was passed in Assembly in October 1986

26. State the meaning of market segmentation.


Market segmentation is the process of dividing a market of potential customers into groups, or segments,
based on different characteristics. The segments created are composed of consumers who will respond
similarly to marketing strategies and who share traits such as similar interests, needs, or locations.

27. What is data warehousing?


Data warehousing is the process of constructing and using a data warehouse. A data warehouse is
constructed by integrating data from multiple heterogeneous sources that support analytical reporting,
structured and/or ad hoc queries, and decision making.

28. What is market- based analysis?


Market Basket Analysis is a modeling technique based upon the theory that if you buy a certain group
of items, you are more (or less) likely to buy another group of items. For example, if you are in an
English pub and you buy a pint of beer and don't buy a bar meal, you are more likely to buy crisps

29. Define marketing research.


Marketing research is "the process or set of processes that links the producers, customers, and end users
to the marketer through information used to identify and define marketing opportunities and problems;
generate, refine, and evaluate marketing actions; monitor marketing performance; and improve
understanding of marketing as a process. Marketing research specifies the information required to
address these issues, designs the method for collecting information, manages and implements the data
collection process, analyzes the results, and communicates the findings and their implications.
SECTION – B

1. Describe the process of communication.


1. Sender /source
2. Message
3. Encoding
4. Channel
5. Receiver
6. Decoding
7. Feedback
8. Noise

2. Explain the types of business letter.


Types of formal /business letters are as follows.
1. Office memorandum.
2. Good news letters
3. Bad news letters
4. Sales letters
5. Credit letter
6. Offer and quotation
7. Complaint letter
8. Collection letter
9. Resume
10. Status enquiry

3. Explain the benefit of CRM.


1. Increased sales revenues and reduced cost of sales.
2. Increased customer satisfaction.
3. Lower costs of recruiting customers.
4. Increased customer retention and loyalty.
5. Evaluation of customer profitability.
6. Excellent customer service.
7. Customer knowledge.
8. Customization.
9. Positive referral creation.
10. Reduced costs through customer self-service.
11. Opportunity to cross-sell and up-sell.
12. Decreased general sales and marketing.

4. Explain the types of customer and their needs.


1. Functionally.
2. Price
3. Convenience.
4. Experience
5. Design
6. Performance.

5. Explain the role of data warehousing and data mining in CRM.


A data warehousing is a technique for collecting and managing data from varied sources to provide
meaningful business insights. It is a blend of technologies and components which allows the strategic
use of data.
Role:
1. Decision makers who rely on mass amount of data
2. Users who use customized, complex processes to obtain information from multiple data sources.
3. It is also used by the people who want simple technology to access the data
4. It also essential for those people who want a systematic approach for making decisions.
5. If the user wants fast performance on a huge amount of data which is a necessity for reports, grids or
charts, then Data warehouse proves useful.
6. Data warehouse is a first step If you want to discover 'hidden patterns' of data-flows and groupings.

6. Elaborate the various processes involved in market segmentation.


1. Establish overall objectives
2. Decide the bases for segmentation
3. Selection of variables
4. Profile the segments
5. Evaluate attractiveness
6. Selection of segment.

7. Bring out different types of data.


1. Identity data
2. Quantitative data
3. Descriptive data
4. Qualitative data.

8. Describe the basic elements of communication.


1. Sender /encode / speaker
2. Message
3. Medium /channel
4. Receiver/decoder / listener
5. Feedback.

9. In your view, why a company need CRM


1. Streamline your sales process
2. Centralize customer information
3. Accompany the customer journey
4. Foster inter-departmental cooperation

10. Explain the various forms of oral communication.


1. Informal face-to –face talk.
2. Interviews
3. Group communication
4. Speeches and presentations.

11. Write a short note on Talwar committee report.


Talwar committee (1975) examined the nature of the customer services rendered by the banks. The
committee viewed customer services as dynamic concept and recommended that the bank should assess
and re assess on a continuous basis the customer’s perception about bank services and formulates
strategies to appraise and improve the customer services. The committee recommends setting up of
customer forum at district, state and National level in 1986.
Recommendation of Talwar’s committee:
1. Establishment of customer services committee/ staff committee in the ever branch.
2. Customer meets to be held at the branches at least once in a half year.
3. 15th of every month (next day if 15th is a holiday) to be observed as customer’s day at branches and
administrative officers.
4. Provision of complaint- cum- suggestion box n every branch.
5. Provision of ‘may I help you’ counter in branches.
6. Immediate credit of cheques up to Rs. 2, 500 which has since been increased to Rs.15, 000.
7. Payment of pencil interest in case of delay of collection of cheques.
8. In the year 1995 “Banking Ombudsman” was established by RBI with objectives of resolving
customer grievances in a quick inexpensive manner.

12. What are the special relationship between banker and customer?
Right of banker
1. Right of Lien
2. Right of set-off
3. Right to appropriate payments
4. Right to charge interest
5. Right not to produce books of accounts
6. Right under garnishee order
7. Right to close accounts.

13. Explain the role of data warehousing and data mining in CRM.
A data warehousing is a technique for collecting and managing data from varied sources to provide
meaningful business insights. It is a blend of technologies and components which allows the strategic
use of data.
Role:
1. Decision makers who rely on mass amount of data
2. Users who use customized, complex processes to obtain information from multiple data sources.
3. It is also used by the people who want simple technology to access the data
4. It also essential for those people who want a systematic approach for making decisions.
5. If the user wants fast performance on a huge amount of data which is a necessity for reports, grids or
charts, then Data warehouse proves useful.
6. Data warehouse is a first step if you want to discover 'hidden patterns' of data-flows and groupings.

14. Explain role of CRM in customer satisfaction and loyalty.


1. Satisfied but disloyal customers: A customer can be fully satisfied but may not be loyal due to
following reasons:
a. Entrepreneur Customer
b. Pressure from Competitors
c. Outdated Suppliers
2. Unsatisfied but loyal customers: The other abnormal situation is when the customer is loyal but is
unsatisfied. The reasons for this are following:
a. Lack of available options
b. Improved Supplier
c. Customer Inertia

15. Elements of communication


The following are the elements of communication
1. Sender
2. Receiver
3. Message
4. Channel
5. Feedback
16. Essentials of business letter
1. Keeping reader’s interest in mind
2. Using correct tone
3. Being sincere
4. Preferring active voice
5. Being consistent
6. Using concrete words

17. Advantages of CRM


1. Increased sales revenues and reduced cost of sales
2. Increased customer satisfaction
3. Lower cost of recruiting customers
4. Increased customer retention
5. Evaluation of customer profitability

18. Physical concepts of business letter


1. Letterhead
2. Date
3. Inside name and address
4. Courtesy title
5. Salutation
6. Message
7. Complimentary closure
8. Signatures and designations
9. Reference initials
10. Enclosure and copy line

19. Tools used for public relations


1. Press, radio and TV/Media Relations
2. Media tour
3. Newsletters
4. Special events
5. Sponsorships
6. Employee communication and relation
7. Website development

20. Modern services rendered by banks to customers


Modern services rendered by banks are:
1. Providing ATM cards
2. Credit card facility
3. Mobile banking
4. Internet banking
5. Online accounts and kiosk machines

21. Characteristics of quality circles


1. Voluntary membership
2. Training
3. Problem solving
4. Group method
5. Ongoing procedure
6. Support of top management
7. Identification and appreciation
SECTION – C
1. Barriers to effective communication and its remedial measures
1. Physical/ Environmental barriers
2. Semantic/ Language barriers
3. Socio- psychological barriers
4. Organizational barriers
5. Emotional barriers
6. Cross-cultural barriers
7. Technological barriers
8. Personal barriers
The following are the methods to overcome the barriers to communication
1. Focusing on what we know
2. Focusing on the issue. Not the person
3. Being genuine rather than manipulative
4. Empathizing rather than remaining detached
5. Being flexible towards others

2. Nature and types of customers in banks


The following are the nature and types of customers in banks:
1. Minor accounts
2. Joint account holders
3. Account of partnership firms
4. Accounts of joint stock companies
5. Account of a lunatics
6. Accounts of executors and administrators
7. Accounts of trustees
8. Clubs, associations and educational institutions
9. Account of joint Hindu family
10. Account of married women
11. Account of sole proprietary concerns
12. Accounts of cooperative societies and cooperative banks
13. Non-Resident Indians (NRI)

3. Relationship between banker and customer


There are two types of relationship between banker and customer:
General relationship
1. Debtor and creditor
2. Agent principal
3. Trustee-beneficiary
4. Bailee-bailer
5. Lessor-lessee
6. Guarantor and guarantee
7. Fiduciary relationship
Special relationship
1. Lien and set-off
2. Appropriate payment
3. Charge interest
4. Garnishee order
5. Close accounts
6. Banker obligations
7. Customer obligations
4. Explain the barriers to effective communication and suggest remedial measures.
1. Physical /environment barriers
2. Semantic / language barriers
3. Socio- psychological barriers
4. Organization barriers
5. Emotional or psychological barriers
6. Cross- cultural barriers
7. Technological barrier
8. Personal barrier.

5. What are the various ways to deploy CRM? What are their advantages and disadvantages?
Advantages of CRM:
1. Increased sales revenues and reduced cost of sales.
2. Increased customer satisfaction.
3. Lower costs of recruiting customers.
4. Increased customer retention and loyalty.
5. Evaluation of customer profitability.
6. Excellent customer service.
7. Customer knowledge.
8. Customization.
9. Positive referral creation.
10. Reduced costs through customer self-service.
11. Opportunity to cross-sell and up-sell.
12. Decreased general sales and marketing.

Limitation of CRM:
1. Requires top- management support
2. Confusion in attributes
3. Problem in implementation
4. Building relationship
5. Not functionally organized
6. Customer dissatisfaction
7. Front line staff

6. “Retaining existing banking customer is more difficult than acquiring new customer”. Discuss.
1. It should be used for the purpose of staying connected to existing customers, not making sales to
new customers
2. Don’t use the system to sell anything to your existing customers—if you connect, they will buy
3. Communicate gratitude for your customers’ business more than once, and not just when they buy
4. Validate your customers—their importance, their hard work and their value, and do it consistently
over an extended period of time
5. Make your messages personal to customers, using their first name and highlighting something
special about them with each communication
6. For a business to survive in coming years, it’s critical to personally connect with every customer
because with advances in technology and increased competitive pressures, if you don’t connect
someone else probably will.

7. Explain the procedure of redressal of grievance


Grievance Redressal typically covers the following types of complaints:
1. Service Unavailability
2. Non-Delivery against Commitment
3. Excessive Delays
4. Injustice concerns (such as over race, caste, sex)
5. Staff Misbehaviour
6. Malpractice

Grievance Redressal Options available to Organizations


1. Paper-based Feedback Forms
2. Contact Us Links
3. Customer-driven Feedback Websites
4. Organization-oriented Portals
5. Custom-developed Ticketing Systems

8. Explain the difference bases of market segmentation.


Market segmentation is the process of dividing a market of potential customers into groups, or segments,
based on different characteristics. The segments created are composed of consumers who will respond
similarly to marketing strategies and who share traits such as similar interests, needs, or locations.
BASES OF MARKET SEGMENTATION
1. Geographic segmentation
2. Democratic segmentation
3. Psychographic segmentation
4. Behavioral segmentation.

9. Explain oral and written communication. Describe their advantages and the ways you can make it
effective.
Advantages of oral communication:
1. Instant feedback
2. Better relationship
3. Time saving
4. Effective tool of persuasion.
Advantages of written communication:
1. Can’t be deformed
2. Economical
3. Clear and specific
4. Record can be kept.

10. Explain the qualitative measurement methods of CRM.


1. Operational CRM
2. Analytical CRM
3. Collaborative CRM.

11. Explain the relationship between a banker and customer based on debtor and creditor
relationship.
1. Creditor must demand payment
2. Proper place and time of demand
3. Demand must be made in proper form.

12. Explain redressal mechanism as pre customer protection act.


Three Tier Consumer Grievances Machinery under the Consumer Protection Act!
1. District Forum:
District forum consists of a president and two other members. The president can be a retired or
working judge of District Court. They are appointed by state government. The complaints for goods or
services worth Rs 20 lakhs or less can be filed in this agency. The agency sends the goods for testing
in laboratory if required and gives decisions on the basis of facts and laboratory report. If the
aggrieved party is not satisfied by the jurisdiction of the district forum then they can file an appeal
against the judgment in State Commission within 30 days by depositing Rs 25000 or 50% of the
penalty amount whichever is less.
2. State Commission:
It consists of a president and two other members. The president must be a retired or working judge of
high court. They all are appointed by state government. The complaints for the goods worth more than
Rs 20 lakhs and less than Rs 1 crore can be filed in State Commission on receiving complaint the State
commission contacts the party against whom the complaint is filed and sends the goods for testing in
laboratory if required. In case the aggrieved party is not satisfied with the judgment then they can file
an appeal in National Commission within 30 days by depositing Rs 3500 or 50% of penalty amount
whichever is less.
3. National Commission:
The national commission consists of a president and four members one of whom shall be a woman.
They are appointed by Central Government. The complaint can be filed in National Commission if the
value of goods exceeds Rs 1 crore.

13. Define marketing research. State the step involved in the process of marketing research.
According to Philip Kotler, “marketing research is the systematic design, collection, analysis, and
reporting of data relevant to a specific marketing situation facing an organization.
Step involved in marketing research:
1. Problem definition
2. Development of an approach to the problem
3. Research design formulation
4. Field work or data collection
5. Data preparation and analysis
6. Report preparation.

14. Explain the types of customers with example


1. Loyalists– this group is made up of customers who are satisfied or completely satisfied. They also
buys product from you repeatedly and stay loyal. They are one of the most valuable assets you can earn, as not
only they guarantee your company gets regular revenues, but also they spread a positive word about your brand,
giving you free and genuine advertisement. Near Apostles are almost as satisfied and loyal as Apostles, but they
need something more.

2. Mercenaries are satisfied customers, but they switch between brands. They are usually price
sensitive, looking for bargains and best offers, buying on impulse, pursuing fashion trends. They don’t feel any
attachment to particular brands. They usually expensive to acquire and difficult to keep

3. Hostages are not satisfied, but they keep repurchasing from your company. Why? They are usually
stuck with a company because of monopoly situation on the market or high switching costs. They may easily
turn into defectors.

4. Defectors are probably the biggest nuisance to your company. They are neither satisfied nor loyal
and very often spread negative word-of-mouth about your brand, ruining your reputation. Terrorists fall into
Defectors’ segment. They are customers who had a bad experience with your brand (not necessarily because of
your fault) and they don’t hesitate to publicly complain about it.

15. Write a note on COPRA forum.


Answer:
The Consumer Protection Act 1986 was enacted for better protection of the interest of consumers. The
provision of the act came into force from 15-04-1987. Consumer Protection Act imposes strict liability
on a manufacturer, in case of supply of defective goods by him and a service provider in case of
deficiency in rendering of his services.
The act was passed in Lok sabha on 09-12-1986 and in Rajya sabha on 10-12-1986, assented by
President of India on 24-12-1986. CPA was published in the Gazette of India on 26-12-1986. CPA was
enacted in 30-01-1987 that was 37th year of the Republic Day of India and it was amended from time to
time i.e 1991, 1993, 2002 and so on.

16. Discuss the role of data mining in CRM.


Answer:
1. Data mining techniques in CRM assist your business in finding and selecting the
relevant information that can then be used to get a holistic view of the customer life-cycle
2. It comprises of four stages: customer identification, attraction, retention, and
development.
3. The more data there is in the database, the more accurate the models will be created
and their subsequent use will result in more business value.
4. Data mining typically involves the use of predictive modeling, forecasting and
descriptive modeling techniques as its key elements.
5. Exploiting CRM in this age of data analytics enables an organization to manage
customer retention, select the right prospects & customer segments, set optimal pricing
policies, and objectively measure and rank the suppliers best suited for their needs.
6. Although it is still a relatively new technology, businesses from all industry verticals
i.e. healthcare, manufacturing, financial, transportation, etc. have invested in data mining
technology to take advantage of historical data.

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