MKTG

Chapter 19 Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1

MKTG

Designed byAmy McGuire, B-books, Ltd.

Prepared byDeborah Baker, Texas Christian University

Lamb, Hair, McDaniel 2007-2008 Custom

er Relationship Management (CRM)

19

CHAPTER


Learning Outcomes

Define customer relationship management

Explain how to establish customer relationships within the organization

Understand interactions with the current customer base

Outline the process of capturing customer data

LO1

LO2

LO3

LO4


Learning Outcomes

Describe the use of technology to store and integrate customer data

Describe how to identify the best customers

Explain the process of leveraging customer information throughout the organizationLO7

LO6

LO5


Define customer relationship management

What Is Customer What Is Customer Relationship Management?Relationship Management?

LO1


LO1

Customer Relationship Management

A company-wide business

strategy designed to optimize

profitability, revenue, and

customer satisfaction by

focusing on highly defined

and precise customer groups.

CustomerRelationshipManagement

CustomerRelationshipManagement


LO1

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

Online

http://www.crmdownload.com


LO1

Customer Relationship Management Cycle

Identify customer relationshipsIdentify customer relationships

Store and integrateStore and integratecustomer data using ITcustomer data using IT

Capture customer data Capture customer data based on interactionsbased on interactionsIdentify best customersIdentify best customers

Understand interactions Understand interactions with current customer basewith current customer base

Leverage customerLeverage customerinformationinformation


LO1

Implementing a CRM System

Key Points:

1. Customers take center stage

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


REVIEW LEARNING OUTCOMELO1

Customer Relationship Management


Explain how to establish customer relationships within

the organization

Identify Customer RelationshipsIdentify Customer RelationshipsLO2


Identify Customer Relationships

LO2

The company customizes its

product and service offering

based on data generated

through interactions between

the customer and the company.

Customer-CentricCustomer-Centric



LO2

An informal process of

collecting customer data

through customer comments

and feedback on product or

service performance.

LearningLearning



LO2

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

LO2

Qualitative facts Qualitative facts

Customer actionsCustomer actions

CommentsComments

Experiential observationsExperiential observations

CollectedCollectedInformation Information

Includes: Includes:

CollectedCollectedInformation Information

Includes: Includes:


Empowerment

LO2

Delegation of authority to solve

customers’ problems quickly—

usually by the first person that

the customer notifies regarding

the problem.

EmpowermentEmpowerment



Identifying Customer

Relationships


Understand interactions

with the current customer base

Interactions of the Interactions of the Current Customer BaseCurrent Customer Base

LO3


Interactions of the Current Customer Base

LO3

Requested Service

Channel PastRelationship

CurrentTransaction

Customer


Interactions of the Current Customer Base

LO3

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.

Online

http://www.bestbuy.com



Interactions with Current Customer Base

WebWeb

Point of SalePoint of Sale

KioskKiosk

Delivery, InstallationDelivery, Installation

SurveySurvey

Product RegistrationProduct Registration

Customer


Outline the process of capturing

customer data

Capture Customer DataCapture Customer DataLO4


LO4

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

Online

http://www.geico.com



Capturing Customer Data


Describe the use of technology to store

and integrate customer data

Store and Integrate Store and Integrate Customer DataCustomer Data

LO5



Store and Integrate Customer Data

DatabaseDatabase

Compiled listCompiled listResponse listResponse list

Data Warehouse

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


Describe how to identify the best

customers

Identifying the Best CustomersIdentifying the Best CustomersLO6


Identifying the Best Customers

LO6

DataMining

DataMining

A data analysis procedure

that identifies significant

patterns of variables and

characteristics that pertain to

particular customers or

customer groups.


Data Mining

LO6

Identify and profile the best customers

Calculate their lifetime value

Predict purchasing behavior


Data Analysis

LO6

Predictive modelingPredictive modeling

Lifetime value analysisLifetime value analysis

Recency-frequency-monetary analysisRecency-frequency-monetary analysis

Customer segmentationCustomer segmentation


Recency-Frequency-Monetary Analysis

LO6

1. Identifies customers most likely to purchase again

2. Identifies and ranks “best customers”

3. Identifies most profitable customers


Biz Flix

LO6 Casino


Data Manipulation Techniques

LO6

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


Explain the process of leveraging customer information

throughout the organization

Leverage Customer Leverage Customer InformationInformation

LO7


CRM Marketing Database Applications

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



Campaign Management

LO7

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

LO7Communicating offerings in a way

that enhances customer relationshipsCommunicating offerings in a way

that 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

LO7

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

LO7

Multichannel MarketingMultichannel Marketing

CRM DatabasesCRM Databases

RFID technologyRFID technology

Online

http://www.kidsdadsmoms.com



Leveraging 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


Marketing Information

CRM Database

Applications

MKTG

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