copyright cengage learning 2013 all rights reserved 1 chapter 21: customer relationship management...

Copyright Cengage Learning 2013

All Rights Reserved

1

Chapter 21: Customer Relationship

Management (CRM)

Introduction to

Designed & Prepared by Laura RushB-books, Ltd.


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Learning Outcomes

Define customer relationship management

Explain how to identify customer relationships with the organization

Understand interactions with the current customer base

Outline the process of capturing customer data

LO1

LO2

LO3

LO4


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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 organization

LO5

LO6

LO7

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Customer Relationship Management

A company-wide businessstrategy designed to optimize

profitability, revenue, and customersatisfaction by focusing on highly

defined and precise customergroups.


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Identify Customer Relationships

Customer-Centric - The company customizes its product

and service offering based on data generated through interactions between the

customer and the company.


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Learning

An informal process of

collecting customer

data through customer

comments and feedback on

product or service performance.


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Knowledge Management

The process by which learned

information from customers is

centralized and shared in

order to enhance the relationship

between customers and

the organization.


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Interactions of the Current Customer Base

8

Touch-Points - All possible areasof a business where customers

communicate with that business.

Point-Of-Sale Interactions - Communications between

customers and organizations thatoccur at the same point of sale,

normally in a store.


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Customer Data

Data Warehouse - A central

repository for data from various

functional areas of the organization

that are stored and inventoried on a

centralized computer system.

Database - A collection of data, especially one

that can be accessed and manipulated by

software.


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Data Analysis

Predictive modelingPredictive modeling

Lifetime value analysisLifetime value analysis

Recency-frequency-monetary analysisRecency-frequency-monetary analysis

Customer segmentationCustomer segmentation


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Data Manipulation Techniques

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.


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Campaign Management

Communicating offerings in a waythat enhances customer relationships

Communicating offerings in a waythat enhances customer relationships

Developing customized offerings for appropriate segment

Developing customized offerings for appropriate segment

Pricing these offeringsattractively

Pricing these offeringsattractively


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Retaining Loyal Customers

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


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Cross–Selling Other Products and Services

• CRM provides opportunities to cross-sell related products

•Cross-sell to customers with demographic, lifestyle, or behavioral characteristic matches

•Internet companies use product and customer profiling to reveal cross-selling opportunities


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Targeted Marketing Communications

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


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Reinforcing Customer Purchase Decisions

•Cognitive dissonance is the feeling consumers experience when they recognize inconsistency between values and opinions and their purchase behavior

•Thanking customers help cement a long-term, profitable relationship

•Update customers periodically on the status of their order


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Improving Customer Service

•Level of customer service is influential in customer retention

•Customer retention – the percentage of customers that repeatedly purchase products from a company


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Privacy Concerns

• How companies use consumer data is governed by some laws, such as Gramm-Leach-Bliley Act and HIPAA

• Many companies have privacy policies, in line with growing consumer concerns over privacy.


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copyright cengage learning 2013 all rights reserved 1 chapter 21: customer relationship management...

Documents

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customer data data warehouse

customer comments

customer satisfaction

learning outcomes

current customer base

precise customer groups

collection of data