Customer Relationship Management

Key Concepts

Customer RelationshipManagement Strategy

Link all processes of the company from its customers through its suppliersLink all processes of the company from its customers through its suppliers

Foster customer-satisfying behaviorsFoster customer-satisfying behaviors

Encourage and track customer interaction with the companyEncourage and track customer interaction with the company

Organize the company around customer segmentsOrganize the company around customer segments

Customer Relationship Management Cycle

Identify Identify customer relationshipscustomer relationships

Store and integrateStore and integratecustomer data using customer data using ITIT

Capture customer data Capture customer data based on interactionsbased on interactionsIdentify Identify best best customerscustomers

Understand interactions Understand interactions with current customer basewith current customer base

LeverageLeverage customer customerinformationinformation

Implementing a CRM System

Key Points:

1. Customers take center stage

2. Business must manage the customer relationship across all points of customer contact

Customer Relationship Management

Identify Customer Relationships

The company customizes its

product and service offering

based on data generated

through interactions between

the customer and the company.

Customer-CentricCustomer-Centric

Identify Customer Relationships

An informal process of

collecting customer data

through customer comments

and feedback on product or

service performance.

LearningLearning

Identify Customer Relationships

The process by which learned

information from customers is

centralized and shared in order

to enhance the relationship

between customers and the

organization.

KnowledgeManagement

KnowledgeManagement

Knowledge Management

Qualitative facts Qualitative facts

Customer actionsCustomer actions

CommentsComments

Experiential observationsExperiential observations

CollectedCollectedInformation Information

Includes: Includes:

CollectedCollectedInformation Information

Includes: Includes:

Empowerment

Delegation of authority to solve

customers’ problems quickly—

usually by the first person that

the customer notifies regarding

the problem.

EmpowermentEmpowerment

Identifying Customer Relationships

Interactions of the Current Customer Base

Requested Service

Channel PastRelationship

CurrentTransaction

Customer

Interactions of the Current Customer Base

Touch PointsTouch PointsAll possible areas of a business

where customers communicate

with that business.

All possible areas of a business

where customers communicate

with that business.

Point-of-SaleInteractions

Point-of-SaleInteractions

Communications between customers and organizations thatoccur at the point of sale, normally in a store.

Communications between customers and organizations thatoccur at the point of sale, normally in a store.

Interactions with Current Customer Base

WebWeb

Point of SalePoint of Sale

KioskKiosk

Delivery, InstallationDelivery, Installation

SurveySurvey

Product RegistrationProduct Registration

Customer

Capture Customer Data

Store visitsStore visits

Conversations with salespeopleConversations with salespeople

Interactions via the WebInteractions via the Web

Traditional phone conversationsTraditional phone conversations

Wireless communicationsWireless communications

Capturing Customer Data

Store and Integrate Customer Data

DatabaseDatabase

Compiled listCompiled listResponse listResponse list

Data Warehouse

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\///////////////////////////////////////////////////////////~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Identifying the Best Customers

DataMining

DataMining

A data analysis procedure

that identifies significant

patterns of variables and

characteristics that pertain to

particular customers or

customer groups.

Data Mining

Identify and profile the best customers

Calculate their lifetime value

Predict purchasing behavior

Amazon.com great at it

Data Analysis

Predictive modelingPredictive modeling

Lifetime value analysisLifetime value analysis

Recency-frequency-monetary analysisRecency-frequency-monetary analysis

Customer segmentationCustomer segmentation

Recency-Frequency-Monetary Analysis

1. Identifies customers most likely to purchase again

2. Identifies and ranks “best customers”

3. Identifies most profitable customers

Data Manipulation Techniques

Lifetime Value Analysis

PredictiveModeling

A data manipulation technique that projects the future value of the customer over a period of years.

A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future.

Identify the Best Customers

CRM Marketing Database Applications

How to Use Info Effectively

LO7

Campaign managementCampaign management

Retain loyalcustomers

Retain loyalcustomers

Cross-selling other products and services

Cross-selling other products and services

Designing targetedmarketing communications

Designing targetedmarketing communications

Reinforcing customerpurchase decisions

Reinforcing customerpurchase decisions

Inducing product trialby new customers

Inducing product trialby new customers

Increasing effectivenessof distribution channel

marketing

Increasing effectivenessof distribution channel

marketing

Improving customer service

Improving customer service

Campaign Management

CampaignManagement

CampaignManagement

Developing product or service

offerings customized for the

appropriate customer segment

and then pricing and

communicating these offerings

for the purpose of enhancing

customer relationships.

Campaign Management

Communicating offerings in a waythat enhances customer relationships

Communicating offerings in a waythat enhances customer relationships

Developing customized offerings for appropriate segment

Developing customized offerings for appropriate segment

Pricing these offeringsattractively

Pricing these offeringsattractively

Retaining Loyal Customers

LO7

Loyalty programs reward loyal customers for making multiple purchasesLoyalty programs reward loyal customers for making multiple purchases

Retaining an additional 5 percent of customers increases profits by as much as 25 percentRetaining an additional 5 percent of customers increases profits by as much as 25 percent

Improving customer retention by 2 percent candecrease costs by as much as 10 percentImproving customer retention by 2 percent candecrease costs by as much as 10 percent

Loyalty programs provide information about customers and trendsLoyalty programs provide information about customers and trends

Targeted Marketing Communications

InfrequentUsers

ModerateUsers

HeavyUsers

• Offer direct incentives, such as a price discount

• Offer more reinforcement of past purchase decisions

• Design around loyalty and reinforcement of purchase

Increasing Effectiveness ofDistribution Channel Marketing

Multichannel MarketingMultichannel Marketing

CRM DatabasesCRM Databases

RFID technologyRFID technology

REVIEW LEARNING OUTCOMELeveraging Customer Information

Campaign management

Retaining loyal customers

Cross-selling other products

Designing targeted marketingcommunications

Reinforcing purchase decisions

Inducing product trial by new customers

Increasing effectiveness of distribution channel marketing

Improving customer service

Marketing Information

CRM Database

Applications