2011.2.21 marketing
DESCRIPTION
TRANSCRIPT
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Lamb, Hair, McDaniel
CHAPTER 21
Customer Relationship Management (CRM)
2010-2011
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LO 1 Define customer relationship management
LO 2 Explain how to identify customer relationships with the organization
LO 3 Understand interactions with the current customer base
LO 4 Outline the process of capturing customer data
Learning OutcomesLearning Outcomes
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LO 5 Describe the use of technology to store and integrate customer data
LO 6 Describe how to identify the best customers
LO 7 Explain the process of leveraging customer information throughout the organization
Learning OutcomesLearning Outcomes
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Define customer relationship management
What Is Customer What Is Customer Relationship Management?Relationship Management?
LO1
5LO1
A company-wide business strategy
designed to optimize profitability,
revenue, and customer satisfaction by
focusing on highly defined
and precise customer groups.
Customer Relationship Management
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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
LO1
Allows companies to tightly focus in on their target marketsAllows companies to tightly focus in on their target markets
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According to an ex-marine and retired Dell marketing executive:
In times of panic there is a lot of shooting going on and not enough aiming.
LO1
Take Aim with Your Marketing Message
Source: Casey Jones, “Go to War Against Wasted Marketing Spending: What Marines Can Teach CMOs About Success Under Fire,” Advertising Age, December 17, 2008.
8LO1
Breathe: Set aside time every week to focus on what your
brand is communicating. Relax: The brand will not fail if you pause to focus. It may fail,
however, if off-target marketing shots waste money. Aim: Make sure your marketing message is standardized and
contain the essential elements listed on the slide.
Squeeze: Apply Steady pressure.
Shoot.
Take Aim with Your Marketing Message
On the rifle range, Marine recruits learn the acronym BRASS: Breathe, Relax, Aim,
Squeeze, Shoot. Marketers can use BRASS to make the most of their marketing budget:
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Aim to persuade: • Who is the target customer?• What is the target customer’s current perceptions
of your brand? • In what context will the target customer make
purchase decisions?• What do you want the target customer to think and
feel after you communicate with him or her? • What are the minimum points you must
communicate in order to achieve your goal?
LO1
If it doesn’t persuade, don’t say it!
Take Aim with Your Marketing Message
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Customer Relationship Management Cycle
Identify customer relationships
Store and integratecustomer data using IT
Capture customer data based on interactionsIdentify best customers
Understand interactions with current customer base
Leverage customerinformation
LO1
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Implementing a CRM System
Key Points:
1. Customers take center stage
2. Business must manage the customer relationship across all points of customer contact
LO1
12LO1
Customer Relationship Management
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Explain how to identify customer relationships with the organization
Identify Customer RelationshipsIdentify Customer Relationships
LO2
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Identify Customer Relationships
Customer-Centric:Customer-Centric:
LO2
The company customizes its product and service offering based on data generated through interactions between the customer and the company. Generates long-lasting relationships
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Identify Customer Relationships
LO2
Learning:Learning:
An informal process of collecting customer
data through customer comments and
feedback on product or service
performance.
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Identify Customer Relationships
LO2
Knowledge Management: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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Knowledge Management
Qualitative facts Qualitative facts
Customer actionsCustomer actions
CommentsComments
Experiential observationsExperiential observations
CollectedCollectedInformation Information
Includes: Includes:
CollectedCollectedInformation Information
Includes: Includes:
LO2
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Empowerment
LO2
Empowerment:Empowerment:
Delegation of authority to solve customers’ problems quickly. Usually solved by the first person that the customer notifies regarding the problem.
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• Training and Skill Development
• Communication Development
• Recognition and Rewards
• Employee Growth Strategy
• Compensation and Benefits Reviews
• Resource and Workload Planning
• Performance Appraisals
• Career Planning
SOURCE: Society for Human Resource Management and CRM TodayLO2
Empowering EmployeesEmpowering Employees
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Identifying Customer Relationships
LO2
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Understand interactions
with the current customer base
Understand Interactions Understand Interactions of the of the
Current Customer BaseCurrent Customer Base
LO3
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Interactions of the Current Customer Base
Requested Service
Channel PastRelationship
CurrentTransaction
Customer
LO3
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Interactions of the Current Customer Base
LO3
Touch Points:Touch Points:
Point of Sale Interactions:Point of Sale Interactions:
Communications between customers and organizations that occur at the point of sale, normally in a store.
All possible areas of a business where customers communicate with that business
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Interactions with Current Customer Base
WebWeb
Point of SalePoint of Sale
KioskKiosk
Delivery, InstallationDelivery, Installation
SurveySurvey
Product RegistrationProduct Registration
LO3
CustomerCustomer
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Outline the process of capturing
customer data
Capture Customer DataCapture Customer Data
LO4
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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
LO4
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Capturing Customer Data
LO4
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Describe the use of technology to store
and integrate customer data
Store and Integrate Store and Integrate Customer DataCustomer Data
LO5
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• Only useful if consistent and accurate.– Use information technology to capture,
store and integrate important information (data warehousing)
• Useful information:– Purchasing habits– Transaction methods– Product usage
• Access vast amounts of information required to make decisions
LO5
Customer Data
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Store and Integrate Customer Data
DatabaseDatabase
Compiled listCompiled listResponse listResponse list
Data Warehouse
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\///////////////////////////////////////////////////////////~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
LO5
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Describe how to identify the best
customers
Identify the Best CustomersIdentify the Best Customers
LO6
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Identifying the Best Customers
Data Mining:Data Mining:
A data analysis procedure that identifies
significant patterns of variables and
characteristics that pertain to particular
customers or customer groups.
LO6
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Data Mining
Identify and profile the best customers
Calculate their lifetime value
Predict purchasing behavior
LO6
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Data Analysis
Predictive modelingPredictive modeling
Lifetime value analysisLifetime value analysis
Recency-frequency-monetary analysisRecency-frequency-monetary analysis
Customer segmentationCustomer segmentation
LO6
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1. Identifies customers most likely to purchase again
2. Identifies and ranks “best customers”
3. Identifies most profitable customers
LO6
Recency-Frequency-Monetary Analysis
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Data Manipulation Techniques
LO6
Lifetime Value Analysis:Lifetime Value Analysis:
Predictive Modeling:Predictive Modeling:
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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Identify the Best Customers
LO6
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Explain the process of leveraging customer information
throughout the organization
Leverage Customer Leverage Customer InformationInformation
LO7
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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
Improving customer service
CRM Marketing Database Applications
LO7
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Campaign Management
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.
LO7
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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
LO7
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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
LO7
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• Match product profiles to cross-sell products matching customer characteristics
• Modify message to align with consumer relationships to the company’s products
• Thank customers, update about order status, maintain strong relationship– Loyal customers cost less and spend more
with the favored company
Using the Data
LO7
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Targeted Marketing Communications
InfrequentUsers
InfrequentUsers
ModerateUsers
ModerateUsers
HeavyUsers
HeavyUsers
Offer direct incentives, such as a price discount
Offer more reinforcement of past purchase decisions
Design around loyalty and reinforcement of purchase
LO7
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Using the Data
• Use best customers’ data to profile ideal customer– Demographic and behavioral data locate strong potential
customers• CRM helps manufacturers know who is actually buying
their products.– RFID technology improves distribution, gathers info on product
usage• Improves customer service
– Wishlists, recommendations, remember purchase information• Privacy Concerns
– Build relationships on trust• Avoid Spam• Inform users of privacy policy and how information is used
LO7
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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
Improving customer service
Marketing Information
CRM Database
Applications
LO7
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Email Marketing Bumps Web site Traffic
Looking for return customers? Email marketing gets customers to click back. Being well-established, trusted, and easy makes email the ideal medium for marketers to get the word out. Online traffic is fairly simple to track, and using customer information gathered from online purchases offers businesses a relatively simple way to establish a relationship with customers.
Source: “Email marketing ‘a trusted method,’” www.directnews.co.uk, Wednesday November 11, 2009.LO7