chapter 5: relationship marketing: partnerships and alliances
TRANSCRIPT
Chapter 5: Relationship Marketing:
Partnerships and Alliances
©2010 Pearson Education, Inc. publishing as Prentice Hall
What are the types of partnerships high-tech companies form?
What are the reasons for forming such partnerships? How can the risks of partnering arrangements be
mitigated?
What are the key risks of and benefits from outsourcing?
What factors affect high-tech companies’ successful use of outsourcing?
©2010 Pearson Education, Inc. publishing as Prentice Hall
Why do some customers cost more than others to serve?
Are loyal customers more profitable than others?
What is the process companies use to
manage customer relationships?
©2010 Pearson Education, Inc. publishing as Prentice Hall
Intangible resources are the source of competitive advantage
Information and knowledge can be shared ◦These resources grow through use and application
Communication is fundamental to knowledge flows.◦Factors influencing social relations are of
fundamental importance.
©2010 Pearson Education, Inc. publishing as Prentice Hall
The effect of geographic location varies:
◦Diminished when using technology, say, virtual marketplaces and virtual organizations
◦Reinforced by the creation of industry clusters to achieve world-wide excellence.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Knowledge and information "leak" to where demand is highest and the barriers are lowest.
The value of knowledge is higher embedded in systems or processes◦ Don’t let it "walk out of the door" in
people's heads
©2010 Pearson Education, Inc. publishing as Prentice Hall
Products/services with embedded knowledge command price premiums.
Pricing and value depends heavily on context. ◦ The same information or knowledge can have vastly
different value depending on the person and the time.
Human capital (competencies) are a key component of value ◦ Yet downsizing is often seen as a positive "cost cutting"
measure.
©2010 Pearson Education, Inc. publishing as Prentice Hall
“Flattening” of the world◦Computer networking ◦Communications technologies◦The Internet◦Enhanced transportation
Globalization + Knowledge based economy =
COLLABORATION
©2010 Pearson Education, Inc. publishing as Prentice Hall
“Flatteners” with specific implications for high-tech partnerships:
1.Outsourcing2.Offshoring3.Global technology-enabled supply
chains4.Insourcing5.Open source innovation
Thomas Friedman
©2010 Pearson Education, Inc. publishing as Prentice Hall
Complementors
Suppliers
Focal Firm
Distribution
Customers
Competitors
©2010 Pearson Education, Inc. publishing as Prentice Hall
Vertical partnerships: formed between different levels of the
supply chain
◦Buyer-supplier relationships◦Supplier – OEM customers
Efficiencies in accessing materials Collaborate to innovate, differentiating end product
◦Outsource service providers – business customers
©2010 Pearson Education, Inc. publishing as Prentice Hall
Manufacturers – distribution channel members◦Access to downstream markets◦Relay market information
Companies – customers (end-users)◦Relationship marketing ◦Long-term revenue stream◦Source of market information
©2010 Pearson Education, Inc. publishing as Prentice Hall
Horizontal partnerships formed between firms that operate at the
same level of the supply chain
◦Complementors
◦Competitors
©2010 Pearson Education, Inc. publishing as Prentice Hall
Complementary Alliances ◦ Form with companies offering different
components of the end-to-end solution◦ Allows each to maintain focus on own core
competencies◦ Stimulates demand through greater customer
value Competitive Alliances
◦ “Competitive collaboration;” “co-opetition”◦ Compete in some market domains,
collaborate in others
©2010 Pearson Education, Inc. publishing as Prentice Hall
Horizontal Partnerships and Financial Performance
Higher financial performance from competitive alliance activity when: ◦ Moderate level of competitive alliance activity
(versus low or high) ◦ More sophisticated competitor
strategies/knowledge◦ Win/win approach (versus win/lose)
©2010 Pearson Education, Inc. publishing as Prentice Hall
◦Industry consortium: industry-wide coalition typically comprised of competitors who have a shared interest
Set industry standards Influence government regulations Pursue international markets Develop metrics for sustainability
©2010 Pearson Education, Inc. publishing as Prentice Hall
Gain access to resources and skills in a timely, more cost-efficient manner
Reasons vary over the product life cycle (next slide)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Emergence
Growth Maturity
Decline
ProcessInnovation
ProductInnovation
StandardsLicensingTechnology
LicensingR&DMarketing
ManufacturingMarketingProcess R&D
AttackerIncumbent
High
Low
Rate ofMajor
Innovation
Stage of Product Life Cycle
Alliance Types
©2010 Pearson Education, Inc. publishing as Prentice Hall
Uncertainty surrounds product
Purchasers are innovators and technology enthusiasts◦Willing to take risks◦Require accurate portrayal of benefits and
liabilities of the innovation◦Require technically knowledgeable support◦Want new technology early and at a low cost
©2010 Pearson Education, Inc. publishing as Prentice Hall
Why Partner?
◦Alliances are valuable among potential competitors to establish industry standards with:
Licensing agreements Strategic alliances Diversification into complementary products Aggressive product positioning
(details on following slides)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Advantages of licensing strategy
◦ Ensures a wide supply base for the technology◦ Limits the number of technologically incompatible
product choices for customers Hastens market acceptance
◦ Signals the possibility of a larger installed base Provides incentives for suppliers of complementary
products to pursue development
©2010 Pearson Education, Inc. publishing as Prentice Hall
Drawbacks of licensing strategy
◦ May attempt to alter the technology to avoid paying licensing fees or royalties
◦ Original developer loses a possible monopoly position
◦ Competition may lead to lower prices in the market
©2010 Pearson Education, Inc. publishing as Prentice Hall
Strategic Alliance: cooperative agreement with actual/potential competitor(s) to jointly sponsor development of a technological standard
Advantages:◦ Help ensure a wide supply base for the technology◦ Build positive expectations for market demand◦ Co-opt competitors◦ Reduce confusion in marketplace◦ Combined knowledge may produce superior product
©2010 Pearson Education, Inc. publishing as Prentice Hall
Strategic Alliance
Drawbacks:◦ Partner may appropriate the firm’s know-how in an
opportunistic fashion
©2010 Pearson Education, Inc. publishing as Prentice Hall
“Go it alone” strategies for standard-setting Diversification
◦ Company offers multiple elements of the whole product solution
◦ Ex: iPod/iTunes
Aggressive Product Positioning ◦ Company maximizes size of installed base by
penetration pricing, wide distribution, and many models/versions of product
Both strategies have pros/cons
©2010 Pearson Education, Inc. publishing as Prentice Hall
Barriers to Imitation
Firm has Requisite Skills
Existence of Capable Competitors
Aggressive Sole Provider High Yes No
Passive Multiple Licensing
Low No Yes
Aggressive Positioning + Licensing
Low Yes Yes
Selective Partnering High No Yes
©2010 Pearson Education, Inc. publishing as Prentice Hall
Dominant design becomes industry standard◦ License to competitors◦ Form R&D alliances to develop product extensions◦ Form marketing alliances to access new markets
Early adopters◦ Needs increasingly clear◦ Can envision the potential of the new technology
Least price sensitive In a hurry to reap rewards
Process technology replaces innovation in importance
©2010 Pearson Education, Inc. publishing as Prentice Hall
High sales volume and revenue but slower growth
Mass-market adopters Process innovation dominates to
achieve cost controls Outsourced relationships Marketing alliances
©2010 Pearson Education, Inc. publishing as Prentice Hall
Product replaced by new technologies
License disruptive technology from a new competitor
Cycle begins again
©2010 Pearson Education, Inc. publishing as Prentice Hall
Access resources and skills
Gain cost efficiencies
Speed time-to-market
Access new markets
Define industry standards
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop innovations and new products
Develop complementary products
Gain market clout
Maintain focus on core competencies
Learn from partners
©2010 Pearson Education, Inc. publishing as Prentice Hall
Increase project complexity
Loss of autonomy and control
◦ Decisions must be made jointly
◦ Success dependent on another’s efforts
Loss of trade secrets
◦ Attempts to “disarm” competition
Dilution of competitive advantage/ “de-skilling”
©2010 Pearson Education, Inc. publishing as Prentice Hall
Legal issues and antitrust concerns◦Collaboration is necessary to compete
globally Therefore, antitrust laws may encourage
partnering
◦Collaboration may decrease domestic competition
Partnerships may come under scrutiny, Especially if they have an indirect impact on
pricing
©2010 Pearson Education, Inc. publishing as Prentice Hall
Failure to achieve objectives
◦ Incompatible cultures
◦ Lack of attention/resources in managing the
relationship
◦ Trust issues
©2010 Pearson Education, Inc. publishing as Prentice Hall
Interdependence◦Shared mutual dependencies provide motivation
for partnership success
◦Asymmetrical dependence leads to vulnerability and possible exploitation
Caution warranted with partners of unequal size
◦ Low levels of interdependence provide no motivation to relationship
©2010 Pearson Education, Inc. publishing as Prentice Hall
Governance Structure◦Terms, conditions, systems, and processes used
to manage the alliance Unilateral: one party has authority to make decisions Bilateral: governance based on mutual expectations
regarding behaviors and activities Commitment Trust Communication
◦Governance structure should match the partnership’s risk level
©2010 Pearson Education, Inc. publishing as Prentice Hall
Commitment◦Desire to continue the relationship◦Committed members are less likely to
take advantage make decisions that sabotage viability of
relationship◦Demonstrated by
Investments dedicated solely to the relationship
©2010 Pearson Education, Inc. publishing as Prentice Hall
Types of Commitment ◦ Economic need (“have to be committed”)
Does not lead to partnership success
◦ Voluntary desire (“want to be committed”) Based on positive feeling and regard for partner’s
contributions Associated with partnership success
◦ Moral obligation (“ought to be committed”)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Trust ◦Belief that partner’s decisions will serve best
interest of the partnership◦Partner will act honestly and benevolently ◦Trust in the partner’s motives and intents
Trust contributes to ◦Effective information sharing◦Willingness to share scarce/sensitive resources◦Sense of mutual benefit
©2010 Pearson Education, Inc. publishing as Prentice Hall
Effective Communication ◦Frequent sharing◦Includes proprietary information◦Bidirectional (two-way) communication◦Credible and reliable◦Both structured and ad hoc communication
©2010 Pearson Education, Inc. publishing as Prentice Hall
Perceived relationship fairness 3 Types of fairness◦ Distributive: fairness in the distribution of awards
◦ Procedural: fairness of the process to determine distribution of rewards
◦ Interactional: fairness of the nuances of interpersonal treatment
Procedural fairness more important than distributive fairness for long-term relationship success.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Compatible Corporate Cultures◦Different values and beliefs about how things are
done
◦Some companies have reputations as being hard to partner with
◦ If corporate cultures clash, hard to realize partnership benefits.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Integrative conflict resolution and negotiation techniques◦Conflict resolution technique more important
than the level of conflict per se. ◦ Integrative resolution based on:
Both parties have a shared stake in the outcome Addressing needs of both parties Identifying mutually beneficial solution (win/win)
◦ Escalate conflict beyond the operational level to senior level
◦ Negotiation is cheaper than legal recourse
©2010 Pearson Education, Inc. publishing as Prentice Hall
Judicious Use of Legal Contracts◦Contracts may violate the spirit of cooperation,
but
◦Contracts may also clarify obligations and expectations
◦Contracts should be used in combination with bilateral governance
©2010 Pearson Education, Inc. publishing as Prentice Hall
“Spirit of cooperation” is key
Develop competency in partnering ◦ “cooperative competency;” “alliance
competence;” “partnering orientation”
©2010 Pearson Education, Inc. publishing as Prentice Hall
High Risk/High Opportunity Vertical Partnerships
Transfer an entire business function to a partner
Types of Outsourcing ◦ Contract manufacturing ◦ BPO: Business Process Outsourcing◦ ITO: Information Technology Outsourcing◦ Innovation Outsourcing
R&D, Product development, Design ODM Model: Original design manufacturer
©2010 Pearson Education, Inc. publishing as Prentice Hall
Benefits: Gain access to expert performance
◦ Provider has refined knowledge in a specific function
Scale economies◦ Cost efficiencies
Maintain focus on true core competencies
©2010 Pearson Education, Inc. publishing as Prentice Hall
©2010 Pearson Education, Inc. publishing as Prentice Hall
India
Middle East and Africa
Latin America and Caribbean
Central and Eastern Europe
China and Southeast Asia
©2010 Pearson Education, Inc. publishing as Prentice Hall
Offshoring◦ Performing functions outside of client’s home
country
Captive Offshoring◦ Company-owned facilities in another country
Reverse outsourcing◦ An outsourced company opens an office in
original country
©2010 Pearson Education, Inc. publishing as Prentice Hall
Nearshore outsourcing◦ Outsource provider is near company’s own
boundaries, same time zone
Home shoring◦ Domestic outsourcing, or◦ Hiring domestic workers in their own home
Farm Shoring◦ Outsourcing to domestic, rural areas
©2010 Pearson Education, Inc. publishing as Prentice Hall
©2010 Pearson Education, Inc. publishing as Prentice Hall
Cost Savings◦Contract manufacturing in particular◦Driven by economies of scale◦Volume discounts◦Supply chain efficiency
Hone core competencies◦ Outsource non-essential tasks
©2010 Pearson Education, Inc. publishing as Prentice Hall
Capabilities of Outsource Providers◦Skilled, low-cost talent pool
Technology Developments◦ Easier for companies to communicate with
remote outsource providers
Mitigate HR Management Issues◦ Overhead- pension plans, insurance, etc.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Other general trends◦Globalization◦Competitive intensity◦Time/Cost pressures
©2010 Pearson Education, Inc. publishing as Prentice Hall
Cost Savings Don’t Materialize◦Difficult to calculate true cost in advance
Quality Concerns◦ 1-800 numbers: endless transfers, confusion◦ Suppliers don’t understand customer’s business
Dependence on Vendor◦ “Switching costs”
©2010 Pearson Education, Inc. publishing as Prentice Hall
Dilution of Competitive Advantage◦Less differentiation from competitor◦“hollowed out”
Risk of Fostering New Competition◦ Sharing trade secrets
Public Backlash◦ Political issue
©2010 Pearson Education, Inc. publishing as Prentice Hall
Success of Outsourcing:
- Cost savings
- New insights Contingency Factors:
- Criticality of business function - Nature of business process/ Degree of customization - Task Characteristics - Vendor capabilities - Governance
Outsourcing: - Whether to outsource - The degree of outsourcing - Type of outsourcing
©2010 Pearson Education, Inc. publishing as Prentice Hall
Define mission-critical business processes; break-through innovations◦ Core intellectual property and skills ◦ Keep in-house
For incremental innovation and non-critical processes ◦ Commodity knowledge and skills ◦ Outsource
©2010 Pearson Education, Inc. publishing as Prentice Hall
PROCESS COMPLEXITY
Simple Complex
StandardizedProcess Outsource
Captive offshoring, selective outsourcing
CustomizedProcess
Selective Outsourcing, Automation
In-house, selectively outsource some
components
©2010 Pearson Education, Inc. publishing as Prentice Hall
Economies of scale◦ Can the function be aggregated across customer/OEM
businesses?◦ If not: don’t outsource
Transfer of explicit, codified knowledge◦ Can the function be clearly mapped and
communicated to outsource provider?◦ If not: don’t outsource
Clearly specified ownership of intellectual property rights/risks◦ Can intellectual rights/responsibilities be clearly
articulated?◦ If not: don’t outsource
©2010 Pearson Education, Inc. publishing as Prentice Hall
Vendor Capabilities◦ What are the specific capabilities to perform the
task? ◦ Does the provider have the requisite capabilities
to perform them?
Governance◦ Particularly important for R&D alliances ◦ Controls can limit innovation but are necessary ◦ Controls should be “ex ante” (before the work)
rather than “ex post” (during the work)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Have clear reasons to outsource◦ Not: “my competitors are”
Don’t outsource a mess◦ Map workflow/process carefully
Set up the right type of outsource relationship◦ Maybe captive offshoring, etc.
Be ready for possible backlash Invest time and effort to make it work Treat partners as equals
©2010 Pearson Education, Inc. publishing as Prentice Hall
Continued evolution
◦ Globally Migration to low-cost areas
◦ Politically Rhetoric of lost jobs Mitigate with educated work force
◦ Managerially Balance in-house, strategic alliances, outsourcing
©2010 Pearson Education, Inc. publishing as Prentice Hall
Breakthrough innovations developed by an “innovation ecosystem”◦ A global network of partners – suppliers, customers,
competitors◦ Innovation based on collaboration and sharing of
expertise and knowledge between partners◦ Innovation processes transcend local industry clusters
and national boundaries Driving Factors
◦ Complexity and uncertainty of R&D◦ Globalization of industries◦ Convergence of technologies◦ Resource constraints
©2010 Pearson Education, Inc. publishing as Prentice Hall
Unique form of strategic alliance to generate innovation
Paradox: ◦ “Logic of innovation”
Spontaneous, serendipitous insights◦ “Logic of alliances”
Detail roles and responsibilities Formalized collaborative arrangements
Sharing of knowledge and expertise requires trust, but: ◦ Many strategic alliances lack trust
©2010 Pearson Education, Inc. publishing as Prentice Hall
Success: ◦ Spirit of cooperation◦ Governance
Horizontal (competitive) partners reluctant to share knowledge, but their innovations exhibit: ◦ High levels of product creativity◦ Fast development speed
Geographic proximity does not inhibit information sharing as long as: ◦ Partners have close, relational ties
©2010 Pearson Education, Inc. publishing as Prentice Hall
Industry Clusters Geographic concentrations of companies in
a particular industry◦ Silicon Valley in California ◦ Often highly innovative, due to:
Enhanced knowledge sharing Economies in infrastructure, talent, and social
relationships
©2010 Pearson Education, Inc. publishing as Prentice Hall
Learning from Partners Knowledge sharing key to success of open
innovation model Learning can contribute to positive
relationship outcomes, but: ◦ Can also result in “de-skilling” of partner with loss
of proprietary information. To learn “tacit knowledge,” firms must have
close partnering relationships—◦ Which increases the risk of those partnerships
Use caution and appropriate governance structures.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Marketing is used to develop close, long-term relationships with customers
Win-win solutions
Customers as investments◦ Acquisition cost/customer=
(total cost of marketing campaign) / (# of prospects who become customers)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Customer equity: ◦ net present value of the cash flows associated
with a customer
Lifetime value = customer equity
Net present value cash inflows > present value of cash outflows
(illustration on following slide)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Computing Customer Equity
-50
-40
-30
-20
-10
0
10
20
30
40
50
60
Year 1 Year 2 Year 3 Year 4 Year 5
Profit from Referrals
Profit from IncreasedPurchases
Base Profit
Acquisition Cost
©2010 Pearson Education, Inc. publishing as Prentice Hall
1. Total marketing cost to acquire new customers
2. Number of prospects reached during the campaign
3. Number of prospects who became customers
4. Revenue from a new customer’s initial purchase
©2010 Pearson Education, Inc. publishing as Prentice Hall
5. Expected retention duration for a customer
6. Annual revenues expected from the customer
7. Costs to serve a customer
8. Firm’s cost of capital
9. Present value chart
©2010 Pearson Education, Inc. publishing as Prentice Hall
The Customer Equity Management Process
IdentifyHigh-potential
Customers
DevelopCustomer Acquisition
Strategy
MaximizeCustomer Equity
DevelopCustomer Portfolio
Management Strategy
•Past purchase history•Extent of cross-buying•Depth of buying
•Develop segment-focused offerings
•Share information•Acquisition pricing
•Differentiate between high and low profitcustomers
•Focus on creating trust with high profit customers
•Increase share of walletwith low profit customers
©2010 Pearson Education, Inc. publishing as Prentice Hall
Identify “high potential” customers
Generate profitable revenue stream over time, NPV > 0
Identify the key characteristics among loyal, profitable customers◦Target others who share similar characteristics
©2010 Pearson Education, Inc. publishing as Prentice Hall
Identify “high potential” customers
Predictors of Potential:
◦ Customer share of wallet: % of business in a specific category that a customer does with a particular vendor Large share of wallet = prospect
◦ Cross-buying: purchasing products from multiple categories
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop a Customer Acquisition Strategy
How much money should be spent pursuing a customer?◦ Depends on likelihood of realizing cash flows◦ Balance time horizon to recoup customer acquisition
costs against lifetime value
Four generic strategies (see next slide)
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop a Customer Acquisition Strategy
Retention Profitability (LTV)
Low High
Time Horizon to Recoup Customer
Acquisition Costs
ShortPay as You Go
Full Throttle
LongDivest/
RestructureSlingshot
These strategies are also affected by differentiation and pricing.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop a Customer Acquisition Strategy
Differentiation◦ Service support, personal interaction, expertise,
efficiency More important than quality and delivery performance in
B2B settings. Price
◦ Pricing tactics a double-edged sword in customer acquisition
◦ Risk of acquiring bargain hunters
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop a Customer Acquisition Strategy
Clearly articulate superiority of non-price elements in value proposition
Offer modest price inducement◦ Encourages trial and switching
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop the Customer Portfolio Management Strategy
Assess customer profitability & projected duration of relationship◦ Not all customers are equally valuable◦ Some loyal customers may be more costly to serve
See loyalty strategies on following slide
©2010 Pearson Education, Inc. publishing as Prentice Hall
Butterflies:Good fitHigh profit potentialTransaction satisfactionMilk active accountsCease investing
Strangers:Little fitLowest profit potentialMake no investmentMax transaction profit
True Friends:Good fitBest profit potentialConsistent communicationAttitudinal & behavioral loyaltyDelight customers
Barnacles:Limited fitLow profit potentialMeasure size and share of walletLow share, up- and cross-sellSmall wallet, strict cost control
High Profit
Low Profit
Transaction Relationship
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop the Customer Portfolio Management Strategy
TRUE FRIENDS The most valuable customer group Highly profitable and loyal Relationship-oriented
◦ Seek social, economic, and technical ties
Risk: Overkill Keep relationship fresh with open, frequent
communication
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop the Customer Portfolio Management Strategy
BUTTERFLIES 2nd most valuable customer group Transient, and highly profitable Shoppers
◦ Seek the best value
Risk: continued investment after they’ve “flown”
Capture as much of their business as possible in the short time.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop the Customer Portfolio Management Strategy
BARNACLES Loyal, desire long-term relationship Not very profitable
◦ Low size/volume of transactions◦ Cost to serve them may be high
Risk: create drag Renegotiation may be required
©2010 Pearson Education, Inc. publishing as Prentice Hall
Develop the Customer Portfolio Management Strategy
STRANGERS Lowest Profit Potential Transaction-oriented
◦ Focus on price instead of value Limited buyer-seller communication
Risk: wasted resources◦ company should not invest by marketing to strangers
Ever transaction must produce a profit
©2010 Pearson Education, Inc. publishing as Prentice Hall
Service provider 20%Grocery retail 15%Mail-order 19%Brokerage 18%
Service provider 29%Grocery retail 34%Mail-order 29%Brokerage 33%
Service provider 30%Grocery retail 36%Mail-order 31%Brokerage 32%
Service provider 21%Grocery retail 15%Mail-order 21%Brokerage 17%
High Profit
Low Profit
Transaction Relationship
©2010 Pearson Education, Inc. publishing as Prentice Hall
Used to capture data about customers from any contact within the enterprise
Provide the ability to:◦ Track profitability◦ Detect dissatisfaction before customer is lost◦ Improve
Product selling Retention Loyalty Revenue
©2010 Pearson Education, Inc. publishing as Prentice Hall
Software includes◦ Sales force automation◦ Call-center automation◦ Marketing automation◦ Web sales◦ Web configurators◦ Web analysis and marketing
CRM software revenue is projected to surpass $7.8 billion worldwide in 2008.
©2010 Pearson Education, Inc. publishing as Prentice Hall
Despite all that…
Nearly 1/3 of CRM deployments fail* Sale representatives may reject CRM
◦ Lack of training and understanding Top management goals must be aligned
with CRM goals Relationship marketing philosophy must
come before CRM system*according to AMR Research
©2010 Pearson Education, Inc. publishing as Prentice Hall
Chapter Features Opening Vignette: Apple iPhone Technology Expert: REI (Developing
Industry-Wide Eco Metrics) Technology Tidbit: Slingshot water purifier End-of-Book Case: Xerox; Boeing
©2010 Pearson Education, Inc. publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.