1. Understand the essential elements that comprise a customer relationship management program

2. Describe the relationship that exists between marketing research and customer relationship

3. Illustrate the process of data collection for a customer relationship management program

Chpt 4-5 Learning ObjectivesChpt 4-5 Learning Objectives

• Customer Relationship Management (CRM)– Business strategy

• To understand, anticipate and manage the needs of an organization’s current and potential customers

– CRM• A combination of strategic, process,

organizational, and technological change

Value of Customer Relationship Management

• Customer Relationship Management (CRM)– Integration of customer information

throughout the business– Business enterprise

• Must respond to rapidly changing environments

• Disrupters– Internet –Electronic commerce–New types of businesses

The Essentials of CRM

– Retaining your current customers cheaper than getting new ones

–ratio 1 to 5 for sales and marketing expenditures

– Customer Interaction• Organizations• Centerpiece of CRM Program• Customer Knowledge

The Essentials of CRM

1. Types of relationships with customers

2. Types of interaction required to acquire and capture customer information

3. How to store and integrate the customer data

4. How and when to analyze the information for the best customer segments based on profitability

5. How this information is to be disseminated throughout the enterprise

The Essentials of CRM

• Primary Functions of CRM– To Collect– To Store– To Analyze Customer Interaction

Information • Customer knowledge

Marketing Research and Customer Relationship Management

– MR Captures and Integrates Information• Demographic, psychographic,

behavioral and preference data– Data Used for Two Purposes

• To create customer profiles• To segment customers

– Create a Market Intelligence Culture

Marketing Research and Customer Relationship Management

• Strategic Use of Customer Information

• Two Key Questions1. What does my customer value?

2. What is the value of my customer?

• Primary Information Collected

• MR– Analyzes customer values, likes and dislikes, lifetime value, and profitability

Transforming Marketing Research into Market Intelligence

– Information Based on Transactional Focus• Exchanges with customers—Window of

Opportunity• Build loyalty

– Enterprise Wide Approach to the Use of Information

• Information at every touchpoint

– Technology Support of the CRM Structure• Link-pin—turning customer data into customer

knowledge

Transforming Marketing Research into Market

Intelligence

Understand the meaning of marketing intelligence

• What is a Database• Collection of information indicating what

customers are purchasing, how often they purchase, and the amount they purchase

– Database Generated By• Sales invoices• Warranty cards• Telephone calls• Market research projects

MR and CM: The Database Process

• Purpose of a Customer Database• To develop meaningful, personal

communication with its customers• Specific Purpose of Databases

– To improve efficiency of market segmentation

– To increase repeat purchases– To enhance sales and media effectiveness– To enable users to measure, track and

analyze customer behaviors

Data Collection in a CRM Environment

– Benefits of Databases• Exchanging information with customers• Determining heavy users• Determining lifetime customer value• Building segment profiles

Data Collection in a CRM Environment

• Marketing databases answer crucial questions– Why do some consumers buy our products

or services regularly, while others do not?– How do our products compare with the

competition?– What is the relationship between perceived

value and price of the product?– How satisfied are customers with the service

level and support for the product?– What are the comparisons among lifestyles,

demographics, attitudes, and media habits?

Data Collection in a CRM Environment

• Marketing Research Question– Description– Prediction

• Data Mining Approaches– Profile groups– Predict customer satisfaction levels

Database Technology and Data Warehousing