Customer/Audience Relationship Management

Exercise

Ask the neighbour behind you what other words they might use to define a customer?

Ask them the difference between a customer and a client?

Purchaser, vendee, end user, prospect, shopper, guest, buyes

A customer is simply a recipient of products or services in exchange for money. Even though the relationship to the provider might be long lasting, the sense is of discrete exchanges.

A client is engaged in a more qualitative relationship in which the provider generally applies professional skills to offer often intangible commodities such as legal services, insurance policies, etc.

Another distinction is that a customer is more likely to visit a retail establishment, whereas a client may more easily receive services without being physically present at the place of business.

Definition“The practice of identifying, attracting and retaining the

most valuable customer to generate the profitable growth. It is the process by which companies manage relationships with their existing customers and new prospects.”

“A term for methodologies, technologies and e-commerce capabilities used by companies to manage customer relationships.”

Recently this definition has been extended to target a broader audience, not specifically existing customers.

Why?

ImportanceThere has been a shift from transactional

marketing to relationship marketing.Issues such as customer loyalty, brand loyalty and

customer lifetime value have become increasingly important.

It has been realized that it is easier and cost effective to retain current customers rather than seeking new ones.

Advances in technology have changed consumer buying behavior Technology and the Web has changed the way

companies approach CRM strategies.

A loyal customer is one who…

Customer loyalty pays off

Satisfaction vs. Loyalty

Two Strategic ImperativesImage and brand management

Non personal communication

Customer contact managementPersonal communication/Two way dialogueThe coordination and management of all

personal communications between organizations and it’s customers

Mail, telephone, email, social media, internet

Customer Contact Management B2B Communications

First line contact is with trade customersVery different to the contact made with end

customersThe supplying organizations needs to be able

to manage pre-purchase transaction and post-purchase situations in order to build relationships

Database MarketingUsed to focus marketing activities towards

targetsThe use of accurate customer and prospect

customer information, competitor information, marketing information and internal company information.

Examples of database marketing:CASS – Computer-aided sales supportDRM – Direct response marketingCIS – Customer information and service

3 Components of Database MarketingComputer aided sales support

Internal support/informationThe direct access to the database via pc’s and notebooks Personal tools (diary/organisers), email, fax

Direct response marketingUsed by marketers target and contact end usersBased on addressable communicationsDirect mail, telemarketing, email, text messaging

Customer information and serviceCustomer initiated contactBased on the use of free phone or local number, email or

over the internet

Electronic Marketing and TelemarketingElectronic marketing

The utilization of the internet to transact business

Also known as E-commerceTelemarketing

The planed and controlled use of telephone communication to build profitable transactions and relationships with customer groups (actual and potential) who impact on an organizations success.

Call centres, automated call distributor

Types of market segmentationThe type of segmentation is to a large extent

determined by the product

Traditional market segmentation(Geo)demographicsLifestage

Behavioural segmentationPsychographics

VALS

Values, Attitudes and Lifestyle(VALS)

Western Japan

Strategic Implication Of Customer Contact Management

IntegrationAdvances in technologies provide businesses with

reliable and profitable ways of improving enhanced customer contact management.

Reducing costs of sales and communicationsUsing traditional selling methods (sales person) is

expensive and not very effective.Less costly techniques and marketing functions

Extended Communication optionsReduce contact and transaction costsAllowing customers more means of contactImproving customer service

Strategic Implication Of Customer Contact Management Cont.

Coverage and PenetrationCustomer contact management is an effective

and cost effective way of reaching specific target markets

Developing a mixed approach and new channels

Customer Retention/Relationship MarketingCustomer has more control

More available information, new market entrants, wider choices, new channels

New technologies allow customers to exercise their preference for conducting