Chapter 3: Customer Relationship Management Strategies for Business Markets.
Customer Relationship Management (Chapter 1)
-
Upload
iftekhar-amin-chowdhury -
Category
Documents
-
view
576 -
download
3
description
Transcript of Customer Relationship Management (Chapter 1)
![Page 1: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/1.jpg)
Chapter 1
Concept and Context of CRM
![Page 2: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/2.jpg)
Buyer and Seller Relationship over the Ages
Barter Age Customized Product Age Mass Production Age
- Customer
- Consumer Customization Age: 1:1 Relationship
![Page 3: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/3.jpg)
What is CRM
Strategy, Process, Software, Philosophy, Project???
a) CRM is about Strategy
CRM is about creating a competitive advantage bybeing the best at understanding, communicating, delivering and developing existing customer relationships, in addition to creating and keeping new customers (Strategic CRM)
![Page 4: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/4.jpg)
Ask questions for a good CRM Strategy
What products and services are we offering now and in the future?
In what markets? What customer groups will these products and
services appeal to? Which of these are of greatest value to the
organization? In terms of expenditure, reliability, growth potential?
What additional needs do the most valuable customer groups have? Adiitional products? Additional services?
In what different ways can we do business to deliver to our customers better?
![Page 5: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/5.jpg)
Designing a CRM Strategy
Cog Wheel Process: CRM (UK) Ltd.
(Four Key Areas of the Business)
- Strategy
- People
- Technology
- Processes
![Page 6: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/6.jpg)
D4 Company Analysis
Step 1: Define the existing customer relationship management processes within the company
Step 2: Determine the perceptions of how the company manages their customer relationships both internally and externally
Step 3: Design the ideal customer relationship management solutions relative to the company or industry
Step 4: Deliver a strategy for the implementation of the recommendations based on the findings
![Page 7: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/7.jpg)
What motivates companies to adopt CRM Strategies?
Competition: Globalization
Customer Expectation: e-Commerce
Technology: Touchpoints
Diminishing impact of advertising: Information through e-mail and web sites
![Page 8: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/8.jpg)
What is CRM?
b) CRM – the ‘customer’ thread
Whether the customers are current / potential / selected CRM is about acquiring, retaining, partnering, personalizing relationships with them
CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of these customers.
![Page 9: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/9.jpg)
Concept of Personalization and Customization
Customization: Customization assumes that manufacturer will design / or enable designing a product to suit customer needs.
Personalization: Personalization is about customer becoming a co-creator of the content of their experience.
![Page 10: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/10.jpg)
Relationship Hierarchy
![Page 11: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/11.jpg)
Loyalty Pyramid
![Page 12: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/12.jpg)
Nine Truths of Relationship Marketing
TRUTH # 1: Customers are no longer loyal. TRUTH # 2: Customers do not really want a
relationship but companies do.- Your Best Customers Can Leave- Your Marginal Customers Can Move- Consumers Can Become Customers
TRUTH # 3: Customers want information. TRUTH # 4: Customers not only want to be
thanked for their patronage, they expect it.
![Page 13: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/13.jpg)
Nine Truths of Relationship Marketing
TRUTH # 5: Customers control the selling process.
TRUTH # 6: The Lifetime Value of a customer is not relevant.
TRUTH # 7: Do not overcomplicate the program. TRUTH # 8: Keep reporting simple and focused
on the customer. TRUTH # 9: WHAT IF? Ask it often. Experiment
every chance you get and don’t call it testing.
![Page 14: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/14.jpg)
CRM, Marketing and Relationship Marketing
Investment in ‘relationship’ with various stakeholders is very important. CRM is the domain of relationship management with customers.
Industrial Revolution: “This is what I make, won’t you please buy it?”
Customer Revolution: “This is what I need, Can’t you please make it.”
Companies have to turn from a ‘make and sell’ philosophy to ‘sense and respond’ philosophy.
[Please look at the Table at Page No. 21]
![Page 15: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/15.jpg)
Holistic Marketing Framework
The THREE dimensions (CRM, Relationship Marketing and Marketing) are extremely lucidly integrated in a concept called ‘Holistic Marketing’ framework.
The Holistic Management framework enables management to answers following questions:
1. How can a company identify new value opportunities for renewing its marketing – (Marketing Dimension)
2. How can a company create more promising new value offering? – (Stakeholders Relationship Dimension)
3. How can a company use its capabilities and infrastructure to deliver the new value offering efficiently? – (CRM Dimension)
![Page 16: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/16.jpg)
Holistic Marketing Framework
The THREE dimensions (CRM, Relationship Marketing and Marketing) are extremely lucidly integrated in a concept called ‘Holistic Marketing’ framework.
Management Decision depends on: 1. How can a company identify new value opportunities for
renewing its marketing – (Marketing Dimension)2. How can a company create more promising new value offering?
– (Stakeholders Relationship Dimension)3. How can a company use its capabilities and infrastructure to
deliver the new value offering efficiently? – (CRM Dimension)
Three organizational functions will play the major role in the economy: the ‘demand management’ function, the ‘resource management’ function and ‘network (Relationship) management’ function.
![Page 17: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/17.jpg)
Transaction VS Relationship Marketing
Transaction Marketing Relationship Marketing Functional Marketing Cross-functional marketing
Focus on a single sale Focus on customer retention
Orientation on product feature Orientation to customer values
Short time scale Long time scale
Little emphasis on customer service High emphasis on customer service
Moderate customer contact High customer contact
Quality is a concern of production Quality is everyone’s concern
![Page 18: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/18.jpg)
Tangible Relationship (30 R’s)
1. Classic Market Relationship: Consisting of the relationship between the supplier and the customer, between the customer-supplier-competitor and the classis network distribution channels.
2. Special Market Relationship: Relationship via full time and part time marketers, interaction between customers and service providers, relationship in industrial and business marketing, e-relationship, green relationship (environment and health based, law based)
3. Mega Relationships: Personal and social network, mass media4. Nano Relationships: Relationship between internal customers
and internal suppliers, the relationship between operations management and marketing, relationship with the employee market.
First TWO considers as Direct market Relationship and Last TWO considers as Non-Market Relationships
![Page 19: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/19.jpg)
Types of CRM
1. Proactive versus Reactive CRM
1. Operational, Collaborative and Analytical CRM
![Page 20: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/20.jpg)
Proactive versus Reactive CRM
![Page 21: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/21.jpg)
Operational, Collaborative and Analytical CRM
1. Operational CRM: Front office CRM. Interaction between the customer and marketer directly through customer touchpoint (POS, Call centers, web etc.).
Face to face touchpoints: Sales/Service/Channel/Events/Stores/Promotions
Database driven touchpoints:Telephones/Email/Mail/SMS/Fax/Loyalty Cards/ATM’s
Mass Media:Advertising/PR/Websites
Any Transaction can take place through these touchpoints. Low level managers interact in this stage and process the information to
the mid level managers
![Page 22: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/22.jpg)
Operational, Collaborative and Analytical CRM
2. Collaborative CRM: Two way dialog between a company and its customers through a variety of channels (business partners, agents, brokers, intermediaries) to facilitate and improve the quality of customer interactions and maintain a long term profitable relationship.
Performed by Mid level managers and transform the information to the top level managers and decision makers.
![Page 23: Customer Relationship Management (Chapter 1)](https://reader037.fdocuments.us/reader037/viewer/2022103013/54683d12af795974338b5b29/html5/thumbnails/23.jpg)
Operational, Collaborative and Analytical CRM
3. Analytical CRM: Known as back-office or strategic CRM. It involves understanding the customer activities that occurred in the front office. Using technology, mass data is going to transformed into ‘business knowledge’ (behavior patters, preferences, values of customers).
Top Level managers and decision makers establish the
process and convey the message to the mid level and low level managers for implementation.