MKT 606: CHAPTER 4

1. MKT 606: CHAPTER 4 STRATEGIC CUSTOMER MANAGEMENT: SYSTEMS, ETHICS, AND SOCIAL RESPONSIBILITY MKT 606 CH 04 MNH

2. PIVOTAL ROLE OF CUSTOMER RELATIONSHIP MANAGEMENT CRM in Perspective • CRM Levels • CRM Strategy Development • CRM Implementation CRM and Database Marketing • Transactions • Customer Contacts • Descriptive Information • Response to Marketing Stimuli MKT 606 CH 04 MNH

3. CUSTOMER RELATIONSHIP MANAGEMENT • CRM is a cross-functional core business process concerned with achieving improved shareholder value through the development of effective relationships with key customers and customer segments. CRM Recognizes That Customers: • Vary in their economic value to the company • Differ in their expectations toward the firm MKT 606 CH 04 MNH

4. 4-3 CUSTOMER LIFETIME VALUE Customer lifetime value (CLV) calculates past profit produced by the customer for the firm – the sum of all the margins of all the products purchased over time, less the cost of reaching that customer • To this is added a forecast of margins on future purchases (under different assumptions for different customers), discounted back to their present value. • This process provides an estimate of the profitability of a customer during the time span of the relationship. • The CLV calculation is a powerful tool for focusing marketing and promotional efforts where they will be most productive. MKT 606 CH 04 MNH

5. 4-5 THE STEPS IN DEVELOPING A CRM STRATEGY Gain enterprise commitment Build a CRM project team Business needs analysis Define the CRM strategy MKT 606 CH 04 MNH

6. CRM Implementation Successful Implementation • Front office with integrating with sales, marketing and service functions across all media • A data warehouse of customer • Business rules developed from data analysis • Measures of performance to improve CRM continually • Integrate the operational support from back office MKT 606 CH 04 MNH

7. 4-6 DEFINE THE CRM STRATEGY Value Proposition 1 5 2 Other Stakeholders Business Case CRM STRATEGY 4 3 Enterprise Transformation Plan Customer Strategy MKT 606 CH 04 MNH

8. 4-7 Causes of Failures • Implementing Without Developing a Customer Strategy • Failing to Initiate Necessary Organizational Change • Allowing Technology to Dominate the CRM Process • Focusing on the Wrong Customers MKT 606 CH 04 MNH

9. 4-8 VALUE CREATION PROCESS Value Received by the Customer Value Received by the Organization THE VALUE EXCHANGE Successful Value Exchange MKT 606 CH 04 MNH

10. 4-10 CRM AND VALUE CHAIN STRATEGY The Perfect Customer Experience “The perfect customer experience, which must be affordable for the company in the context of the segments in which it operates and its competition, is a relatively new concept. This concept is now being embraced in industry by companies such as TNT, Toyota’s Lexus, Oce, and Guinness Breweries, but it has yet to receive much attention in the academic literature. Therefore, multi-channel integration is a critical process in CRM because it represents the point of co-creation of customer value. However, a company’s ability to execute multi-channel integration successfully is heavily dependent on the organization’s ability to gather and deploy customer information, from all channels and to integrate it with other relevant information.” MKT 606 CH 04 MNH

11. CRM and Strategic Marketing • Implementation • Performance Metrics • Short-Term Versus Long-Term Value • Competitive Differentiation MKT 606 CH 04 MNH

12. Ethics and Social Responsibility in Strategic Marketing • Corporate Reputations • Ethical Imperatives • Defining Ethical Standards • Drivers of Ethical Demands • Proactive Responses by Firms • Organizational Involvement • Organizational Culture • Assignment of Responsibility • Ethics Codes • Guidelines and Operating Processes • Actions • Monitoring and Control • CSR Initiatives • Defining CSR • Drivers of CSR • Defensive CSR • Strategic CSR Customer Value and Competitive Positioning MKT 606 CH 04 MNH