Page 199 - DMGT205_SALES_MANAGEMENT

Unit 12: Customer Relationship Management

It's best for boards to set aside two days to meet with finalists. The directors may Notes
split into small groups, rotating candidates through at least three interviews. They
shouldn't hesitate to grill them.
4. Succumbing to fads: Outsiders are in. Between the 1970s and the late 1990s, the
proportion of externally recruited CEOs rose from 8 per cent to 19 per cent. (This
despite studies showing that outsiders are more expensive than insiders-
commanding roughly twice the starting compensation-and perform no better on an
average.) Relying on external labour to fill the top slot should be seen for what it
usually is: a second-best approach.
A fixation on outside saviors also undervalues in-house talent, often assumed to be
bureaucratic, blinkered and beholden to the status quo. This view ignores the fact
that some of the biggest corporate revolutionaries have been insiders. Jack Welch
was already a 20-year company man when he put General Electric in the blender,
while insiders also led dramatic transformations at Circuit City, Intel and Boeing.
Finally, outside hires are too often a symptom of the board's anxiety to please Wall
Street and its bias for new blood. The day AT&T signed Michael Armstrong as CEO,
its market value surged $3.8 billion; the day Kodak signed former Motorola chief
George Fischer, its value climbed $1.4 billion. Never mind that both appointments
were the result of each company's failure to line up an internal successor (and that
those one-day surges proved fleeting). The last people you want weighing in on the
succession process are securities analysts.
5. Keeping Elvis in the building: So the board has picked a new CEO. Now make sure
that the old one leaves the premises. Really, intentionally or not, ex-CEOs can end
up undermining their successors when they linger around the building or the
boardroom. That's why the safest policy is a clean break. It sounds harsh, but as the
outgoing CEO surely knows, nothing succeeds like a smooth succession.

Questions
1. Analyse the reasons behind the poor performance of CEOs in India.
2. What are the ways and techniques used by MNCs for CEOs' performance rating?

12.9 Summary

 CRM can be defined as a frame work to identify, attract, satisfy and retain profitable
customers by managing effective relationships in order to achieve increased and guaranteed
profitability.

 CRM focuses on long term profits and it ignores the view of acquiring customers for
single transaction to earn a little profit at present.
 It is proved that the retention of existing customers is cheaper than attracting new customers.

 CRM does not focus on profit from a single transaction rather it focuses on achieving
better profits in long term by understanding chosen customers and creating value for
them.
 CRM will provide an competitive edge to the organization based on the service offered
rather than competing based on price.

 Close and long-term relationships with customers imply continuing exchange
opportunities with existing customers at a lower marketing cost per customer.

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