customer relationship management (cmr) strategic marketing
TRANSCRIPT
CUSTOMER RELATIONSHIP MANAGEMENT
WHAT IS CUSTOMER RELATION MANAGEMENT (CRM)?• A COMPANY-WIDE BUSINESS STRATEGY DESIGNED TO OPTIMIZE
• PROFITABILITY
• REVENUE
• CUSTOMER SATISFACTION
BY FOCUSING ON HIGHLY DEFINED AND PRECISE CUSTOMER GROUPS
CONCEPT IS TO TREAT CUSTOMERS AS INDIVIDUALS RATHER THAN PART OF A GROUP
CUSTOMER RELATIONSHIP MANAGEMENT STRATEGY
• THE COMPANY ACCOMPLISHES THIS STRATEGY BY
• ORGANIZING THE COMPANY AROUND CUSTOMER SEGMENTS
• ESTABLISHING AND TRACKING CUSTOMER INTERACTIONS WITH THE COMPANY
• FOSTERING CUSTOMER SATISFYING BEHAVIORS
• EXAMPLE WHEN YOU LOGIN TO A WEBSITE LIKE WWW.LISTEN.COM
• RHAPSODY PLAYER TARGETS CONSUMERS WHO STREAM AUDIO
• TRACKS THEIR MUSICAL PREFERENCES AND USAGE
• USES THIS INFORMATION TO OFFER SPECIAL PROMOTIONS & MAKE RECOMMENDATIONS TO YOU SPECIFICALLY
CUSTOMER RELATIONSHIP MANAGEMENT
CRM V. MASS MARKETINGMASS MARKETING MEANS USING ONE APPROACH & HOPING IT HAS MASS APPEAL
CRM ALLOWS YOU TO EFFECTIVELY COMMUNICATE WITH THE INDIVIDUAL CUSTOMER
CUSTOMER RELATIONSHIP MANAGEMENT CYCLE
• CUSTOMER RELATIONSHIP MANAGEMENT SEEMS LIKE A SIMPLE CUSTOMER SERVICE MANAGEMENT STRATEGY
• IT IS A CLOSED-LOOP SYSTEM THAT BUILDS RELATIONSHIPS WITH CUSTOMERS
• CONTINUOUS
• NO PREDEFINED STARTING/ENDING POINT
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
CUSTOMER RELATIONSHIP MANAGEMENT
BRIDGESTONE TIRE USES ONDEMAND 5• GATHERS INFORMATION FROM P.O.S.
• DEMOGRAPHIC, FREQUENCY OF PURCHASES, HOW MUCH THEY PURCHASE, & HOW FAR THEY DRIVE
• GATHERS INFORMATION FROM ALL TYPES OF COMMUNICATION THE CUSTOMER HAS
• HOW OFTEN THEY VISIT A SPECIFIC STORE & PURCHASING HISTORY
• CAPTURES RELATIVE CUSTOMER DATA ON INTERACTIONS
• LAST PURCHASE MADE, DOES CUSTOMER REDEEM COUPONS, LAST FORM OF COMMUNICATION BETWEEN CUSTOMER
• STORE & INTEGRATE CUSTOMER DATA
• STORES CUSTOMER RESPONSES FROM SURVEY, WARRANTY CARDS, ANY CUSTOMER INPUT SOURCE
• IDENTIFY MOST PROFITABLE CUSTOMERS
• NOT ALL CUSTOMERS ARE THE SAME. FOCUS ON MONEY MAKERS
• LEVERAGE INFORMATION
• CUSTOMER DATA IS SENT TO ALL DEPARTMENTS OF A COMPANY. GET ALL INFORMATION TO RIGHT DEPARTMENT.
• SEND CUSTOMERS PROMOTIONS AIMED AT INCREASING STORE VISITS & SALES
CUSTOMER RELATIONSHIP MANAGEMENTCRM KEY POINTS
• CUSTOMERS TAKE CENTER STAGE
• BUSINESS MUST MANAGE THE CUSTOMER RELATIONSHIP ACROSS ALL POINTS OF CUSTOMER CONTACT
IDENTIFY CUSTOMER RELATIONSHIPS
• COMPANIES HAVE A CRM SYSTEM THAT FOLLOWS A CUSTOMER-CENTRIC FOCUS OR MODEL
• CUSTOMER CENTRIC
• AN INTERNAL MANAGEMENT PHILOSOPHY SIMILAR TO THE MARKETING CONCEPT
• COMPANY CUSTOMIZES ITS PRODUCT & SERVICE OFFERING BASED ON DATA GENERATED THROUGH INTERACTIONS BETWEEN THE CUSTOMER AND THE COMPANY
• ALL COMPANY DECISIONS AND ACTIONS ARE A DIRECT RESULT OF CUSTOMER INFORMATION
CUSTOMER RELATIONSHIP MANAGEMENT
• COMPANIES FORCE CUSTOMERS TO LOGIN TO WEBSITES SO THAT THEY CAN GAIN ACCESS TO THEIR INFORMATION & PREFERENCES
• TAKE ADVANTAGE OF ONLINE OPPORTUNITIES; HAVE TO LOGIN
LEARNING
• AN INFORMAL PROCESS OF COLLECTING CUSTOMER DATA THROUGH CUSTOMER COMMENTS AND FEEDBACK ON PRODUCT OR SERVICE PERFORMANCE.
CUSTOMER RELATIONSHIP 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.
• KNOWLEDGE MANAGEMENT INVOLVES COLLECTING INFORMATION THROUGH:
• EXPERIMENTAL OBSERVATIONS
• COMMENTS
• CUSTOMER ACTIONS
• QUALITATIVE FACTS
CUSTOMER RELATIONSHIP MANAGEMENT
EMPOWERMENT
DELEGATION OF AUTHORITY TO SOLVE CUSTOMERS’ PROBLEMS QUICKLY—USUALLY BY THE FIRST PERSON THAT THE CUSTOMER NOTIFIES REGARDING THE PROBLEM.
• EMPLOYEES DON’T HAVE TO RELY ON MANAGEMENT TO MAKE DECISIONS
• TRUSTED TO TAKE CARE OF CUSTOMER WITHOUT SUPERVISION
CUSTOMER RELATIONSHIP MANAGEMENT
INTERACTION
THE POINT AT WHICH A CUSTOMER AND A COMPANY REPRESENTATIVE EXCHANGE INFORMATION AND DEVELOP LEARNING RELATIONSHIPS
• CUSTOMER DEFINES THE TERMS OF THE INTERACTION (OFTEN BY PREFERENCE)
• ORGANIZATION RESPONDS WITH PRODUCTS & SERVICES THAT MEET CUSTOMER NEEDS
• ANY ACTIVITY OR TOUCH POINT A CUSTOMER HAS WITH A COMPANY (DIRECTLY OR INDIRECTLY) CONSTITUTES AN INTERACTION
CUSTOMER RELATIONSHIP MANAGEMENT
TOUCH POINTS
ALL POSSIBLE AREAS OF A BUSINESS WHERE CUSTOMERS COMMUNICATE WITH THAT BUSINESS.
-- AMAZON SAVES YOUR SEARCHES BASED ON LOGIN
POINT OF SALE INTERACTIONS
COMMUNICATIONS BETWEEN CUSTOMERS AND ORGANIZATIONS THATOCCUR AT THE POINT OF SALE, NORMALLY IN A STORE.
-- CHECK OUT WITH STORE CREDIT CARD
CUSTOMER RELATIONSHIP MANAGEMENT
• MOST COMMON WAYS A COMPANY CAN INTERACT WITH CURRENT CUSTOMERS
• WEB
• POINT OF SALE
• KIOSK
• DELIVERY, INSTALLATION
• SURVEY
• PRODUCT REGISTRATION
CUSTOMER RELATIONSHIP MANAGEMENT
CHANNEL INTERACTIONSTHE TRADITIONAL APPROACH FOR ACQUIRING CUSTOMER DATA
THE METHOD OF DATA COLLECTION (HOW INFORMATION IS OBTAINED) IS MOST IMPORTANT
CAN INCLUDE
STORE VISITS
CONVERSATIONS WITH SALES PEOPLE
INTERACTIONS VIA THE WEB
PHONE CONVERSATIONS
WIRELESS COMMUNICATIONS
UNDERCOVER BOSS
• DIRECTV
• HTTP://WWW.YOUTUBE.COM/WATCH?V=CK3RK2DCPJC
• HOW DO THEY (OR COULD THEY) DEVELOP CUSTOMER RETIONSHIPS?
• HOW DO THEY IDENTIFY CUSTOMER RELATIONSHIPS?
• EXAMPLES OF INTERACTIONS BETWEEN A COMPANY & ITS CUSTOMER BASE
• TYPES OF INFORMATION IT WANTS TO CAPTURE
WARM UP
DIRECTV EMPOWERS ITS CUSTOMER SERVICE REPRESENTATIVES TO OFFER DISCOUNTS TO LONG-ESTABLISHED CUSTOMERS IN ORDER TO SOLVE A PROBLEM. THIS IS AN EXAMPLE OF WHICH STAGE OF THE CUSTOMER RELATIONSHIP CYCLE?
A. CAPTURING CUSTOMER DATA
B. IDENTIFICATION OF CUSTOMER RELATIONSHIP
C. LEVERAGING THE CUSTOMER INFORMATION
D. STORING & INTEGRATING CUSTOMER DATA USING INFORMATION TECHNOLOGY
CUSTOMER RELATIONSHIP MANAGEMENT CYCLE
• IDENTIFY CUSTOMER RELATIONSHIPS
• UNDERSTAND INTERACTIONS WITH CUSTOMER BASE
• CAPTURE CUSTOMER DATA BASED ON INTERACTIONS
• STORE & INTEGRATE CUSTOMER DATA USING INFORMATION TECHNOLOGY
• IDENTIFY BEST CUSTOMERS
• LEVERAGE CUSTOMER INFORMATION
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
CUSTOMER RELATIONSHIP MANAGEMENT
DATA WAREHOUSE
A CENTRAL WAREHOUSE OF CUSTOMER DATA COLLECTED BY AN ORGANIZATION.
ESSENTIALLY IT IS A LARGE COMPUTERIZED FILE OF ALL INFORMATION COLLECTED IN THE PREVIOUS PHASE OF THE CRM PROCESS.
TAKES INFORMATION FROM A VARIETY OF DATABASES AND INTEGRATES THEM SO THAT DEPARTMENTS THROUGHOUT AN ORGANIZATION CAN HAVE ACCESS TO ALL PERTINENT CUSTOMER DATA
CUSTOMER RELATIONSHIP MANAGEMENT
• WHEN BUILDING A DATABASE YOU DEVELOP A LIST
• RESPONSE LIST: CUSTOMERS WHO HAVE INDICATED AN INTEREST IN A PRODUCT OR SERVICE
• INCLUDES THEIR NAME & ADDRESSES
• HAVE RESPONDED TO AN OFFER AT SOME TIME
• COMPILED LIST: CREATED BY AN OUTSIDE COMPANY THAT HAS COLLECTED DATA OF POTENTIAL CUSTOMERS
• GATHER INFORMATION FROM TELEPHONE DIRECTORIES OR MEMBERSHIP ROSTERS
• ENHANCE INFORMATION WITH CENSUS DATA & OTHER PUBLIC RECORD INFORMATION
CUSTOMER RELATIONSHIP MANAGEMENT
• GOAL OF A COMPANY IS TO FIND YOUR BEST CUSTOMERS 80/20 RULE: 80% OF YOUR PROFITS COME FROM 20% OF YOUR CUSTOMERS
GOAL IS TO IDENTIFY THAT 20%.
DATA MINING
IDENTIFY AND PROFILE THE BEST CUSTOMERS
PICKUP ON PATTERNS & CHARACTERISTICS TO DETERMINE TRENDS
CALCULATE THEIR LIFETIME VALUE
PREDICT PURCHASING BEHAVIOR
CUSTOMER RELATIONSHIP MANAGEMENT
DATA MINING• CUSTOMER SEGMENTATION
• BREAK DOWN LARGE GROUPS INTO SMALLER HOMOGENOUS GROUPS
• RECENCY-FREQUENCY-MONETARY ANALYSIS (RFM)• MEASURES: RECENTLY PURCHASED MOVES, FREQUENCY, & AMOUNT SPENT
• PROJECTS CURRENT VALUE OF A CUSTOMER TO A COMPANY
• LIFETIME VALUE ANALYSIS (LTV)
• PROJECTS FUTURE VALUE OF A CUSTOMER TO A COMPANY
• EXPLAINS HOW MUCH IT COSTS TO ACQUIRE CUSTOMERS
• LEVEL OF SPENDING TO RETAIN CUSTOMERS
• FACILITATES TARGETING NEW CUSTOMERS
• PREDICTIVE MODELING
• PREDICT WHEN A PURCHASE WILL TAKE PLACE
LEVERAGING CUSTOMER INFORMATION
LEVERAGING MEANS DESIGNING & TAILORING MARKETING STRATEGIES
TO BEST APPEAL TO IDENTIFIED CUSTOMERS
CAMPAIGN MANAGEMENT
• MONITORING THE SUCCESS OF MARKETING STRATEGIES BASED ON SALES, ORDERS, ETC..
• DEVELOP CUSTOMIZED SALES FOR LOYAL CUSTOMERS
• CUSTOMERS THAT SPEND MORE, GET MORE
• ALLOWS COMPANIES TO STORE INFORMATION ABOUT CUSTOMERS & TRENDS
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
Improving customer service
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
REVIEW LEARNING OUTCOME
LO7
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