‘Customer Relationship Management’

When Joann idleman arrives at the airport in Las Vegas, a sleek white limousine

is waiting to whisk her off to

Harrah’s hotel and casino.

She doesn’t bat an eyelash

as she passes Caesar’s place and the

Mirage, two showy resorts

where the 67 year old entrepreneur from California

was once a regular. Now, she wouldn’t dream

of staying anywhere but Harrah’s.

Upon arriving at the hotel,

she is greeted with a big smile by her personal host, Gary Ernest,

who makes her hotel reservations and books her seat at

concerts and boxing matches.

In her suite, she finds

fresh cut flowers, cookies,

chocolate covered strawberries,

cold drinks in the fridge and a

welcoming voice mail from the message box.

If she goes to Harrah’s on her birthday, there’s a cake in her

room. “I think they know my

complete life history,” says idleman.

“Whether it’s a birthday or an anniversary, there’s always something in the room to

acknowledge that, and that, to me,

is special.”

Idleman has been gambling at the Harrah’s since 1995;

in 1998 she started staying in the hotel exclusively.

The year before, the company had rolled out a loyalty card program

called Total rewards, which tracks customers gaming activities and gives them rewards

to encourage them to spend more money at the slots and

tables.

Although Idleman says it was the service and not

the card that made her a Harrah

devotee, the company would not

have been able to provide its high caliber service

without the card.

And thanks to that service idleman’s spending

Increased by 72% from 1997 to the present.

Now, she spends

between $5000 and $ 10,000

on gaming per visit.

Ernest and company better treat her

like a

VIP

Points to PonderBasic needs1.Transport2. Bookings3.Comfortable Stay 4.Entertainment

Delight Needs1.Limousine2.Personal host3.Flowers,cookies,cold drinks, etc.4.Total Rewards Card

Add on’s:The unspoken needs…. Concert Bookings Birthday anniversary

celebrations VIP treatment

….Crm philosophy

Identify the needUnderstand the needSatisfy the needOver-shoot the levels of expectation

Marketing approaches

Product centric(Mass Marketing)

Customer centric(Individual Marketing)

Relationship centric(Cross-level Marketing)

relationship marketing

…you will not be trying to sell a single product to as many customers as possible. Instead, you’ll be trying to sell a single customer as many products as possible-over a long period of time, and across different product lines. To do this, you will need to concentrate on building unique relationships with individual customers, on a 1:1 basis…

-Don Peppers &Martha Rogers

Understanding the customer

-Who is he?-Where does he belong?-Who are around him?-What does he want?-Why does he want it?-For whom does he want it?

CollectWarehouse

& analyze

data

- Summarized CRM

Learning aboutCustomization of

Customers marketing mix

crm is a comprehensive strategy and process of acquiring, retaining & partnering with selective customers to create superior value for the company and the customer

…Views on crm

Mckenna (1991) presents a strategic view by putting the customer first and shifting the roles of marketing from manipulating customer (telling and selling) to genuine customer involvement (communicating and sharing the knowledge). Bickert (1992) says a narrow perspective of CRM is database marketing emphasizing promotional aspects of marketing linked to database efforts.

Vavra (1992) defines CRM as customer retention process in which a variety of after marketing tactics is used for customer bonding or staying in touch after sales is made.

The Six markets approach to crm

Customer

Markets

Internal Markets

Referral Markets

Influence

Markets

Recruit-ment

Markets

Supplier Markets

Emergence of CRM

•De- intermediation process is trigger to CRM growth specially in industries such as banks, airlines, telecom, tourism, insurance

•The advent of TQM right from Deming’s time (1968) in Japan giving rise to JIT processes affecting service aspects

•The birth of digital technology and system of integration

•The realization that customer acquisition is costly affair (The loss of financial and value of goodwill)

•Rise in customers’ expectations of service as well as product quality

Transaction Vs Relationship Marketing

TransactionOne-timeManaging BrandsMass comm.Market shareProfitability of

transactionBrand Equity

RelationshipOngoingManaging PeopleIndividual comm.Customer shareProfitability of

longevityCustomer share

equity

Levels of investment into CRM

1. Basic Marketing 2. Reactive Marketing 3. Accountable Marketing4. Proactive Marketing5. Partnership Marketing ,PRM6. Collaborative Marketing,

cCRM7. Supplier Relationship

Management , SRM

Building customer relationships

Prospect

Customer

Client

Supporter

Advocate

Partner

Psychological steps vis-s-vis Relationship Stages

Prospect Switching tendencies

Customer Satisfaction achieved

Client TrustSupporter ConvictionAdvocate LoyaltyPartner Ongoing

empathy

Why customers move away?

Perceived indiffrence

69%

Product dissatisfac-

tion14%

Competition9%

New Associations5%

Miscellaneous3%

Bonding for effective crm

1. Financial Bonds2. Social bonds3. Customization Bonds4. Structural Bonds

Categories of defectors to crm

1. Price defectors2. Product defectors3. Service defectors4. Market defectors5. Technology defectors6. Organizational defectors

Developing a customer retention program

Measure custome

r retention and

turnover

Interview

former custom

ers

Analyze data on complai

nts

Try to identify switchi

ng barriers

Corrective

measures