CRM in Marketing

1. CRM in Marketing CRM Initiatives

2. CRM Marketing Initiatives • Cross-Selling • Selling a product or service to a customer as a result of another purchase • Selling the right product to the right customer

3. CRM Marketing Initiatives • Cross-Selling (continued) • Selling more products to a customer increases revenue from that customer and costs less than acquiring a new one • Not every customer is a good candidate • It is critical to understand the ways by which customers evaluate how and whether to respond to promotions

4. CRM Marketing Initiatives • Up-Selling • Motivating customers to trade up to more profitable products • Customer Retention • Analyzing customer attrition • Understanding why customers have left • Understanding who • How do you keep them? • Churn prediction • What is CHURN?

5. CRM Marketing Initiatives • Behavior Prediction • Using modeling and data mining techniques, including • Propensity to buy analysis • What product is a particular customer likely to buy next • Next sequential purchase • What product is a customer likely to buy next • Product affinity analysis • Which products will be purchased with other products • Price elasticity modeling and dynamic pricing • Determining the optimal price for a given product

6. CRM Marketing Initiatives • Customer Profitability and Value Modeling • Can a customer be unprofitable but still considered valuable? • Customer Lifetime Value (LTV) • Potential value • Competitive value (wallet share)

7. CRM Marketing Initiatives • Customer value measurement is data-intensive • Value modeling is only as accurate as the customer data is rich

8. CRM Marketing Initiatives • Channel Optimization • Means optimizing a company’s “inbound” channels with its “outbound” means of customer interaction • Knowing how to choose the best approach for each • Understanding the channels through which specific customers prefer to interact with the company AND • How best to communicate with your customers

9. CRM Marketing Initiatives • Personalization • Customizing customer communication based on knowledge preferences and behaviors at the time of interaction • Online messages tailored to a particular customer or customer segment • In the B2C model, personalizaiton is based on the analysis of a customer’s clickstreams

10. CRM Marketing Initiatives • Personalization • Clickstreams • A customers navigation path through a company’s Web site • A company can see not only what a customer purchased by how the customer reached the site in the first place • How he traveled through the site after he got there • How much time he spend on each page • Which products might have stimulated purchases of other products

11. CRM Marketing Initiatives • What new tactics can analyzing clickstreams trigger? • Changes to Web images • Custom promotions or discounts • Customized Web pages according to the visitor’s use of the site

12. CRM Marketing Initiatives • Event-Based Marketing • Time-sensitive marketing or sales communication reacting to a customer-specific event. • Also called event-driven marketing • Can apply to a segment of customers or to individual customers • This is what companies adopting CRM are striving for

13. CRM Marketing Initiatives • Event-based marketing • Combine personalization techniques with process design to ensure that the right action targets the right customer at the right time • Ideal goal is to react to customers in near real-time

14. Eddie Bauer • Read the Case Study • P. 45-49 The CRM Handbook