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Designed by Eric Brengle B-books, Ltd.

10. Marketing Lamb, Hair, McDaniel. Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University. Customer Relationship Management (CRM). CHAPTER 21. Customer Relationship Management. Customer Relationship Management. LO I.

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Designed by Eric Brengle B-books, Ltd.

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  1. 10 MarketingLamb, Hair, McDaniel Designed by Eric Brengle B-books, Ltd. Prepared by Amit Shah Frostburg State University Customer Relationship Management (CRM) CHAPTER 21

  2. CustomerRelationshipManagement Customer Relationship Management LOI A company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.

  3. Identify customer relationships Leverage customerinformation Understand interactions with current customer base Identify best customers Capture customer data based on interactions Store and integratecustomer data using IT LOI Customer Relationship Management Cycle

  4. Identify Customer Relationships LO2 Customer-Centric The company customizes its product and service offering based on data generated through interactions between the customer and the company.

  5. Experiential observations CollectedInformation Includes: Comments Customer actions Qualitative facts Knowledge Management LO2

  6. Current transaction Channel Past Relationship Requested Service LO3 Interactions of the Current Customer Base Customer

  7. Touch Points All possible areas of a business where customers communicate with that business. Point-of-Sale Interactions Communications between customers and organizations thatoccur at the point of sale, normally in a store. http://www.bestbuy.com Online Interactions of the Current Customer Base LO3

  8. Store visits Conversations with salespeople Interactions via the Web Traditional phone conversations Wireless communications http://www.geico.com Online LO4 Capture Customer Data

  9. Data Mining Identifying the Best Customers LO6 A data analysis procedure that identifies significant patterns of variables and characteristics that pertain to particular customers or customer groups.

  10. Customer segmentation Recency-frequency-monetary analysis Lifetime value analysis Predictive modeling LO6 Data Analysis

  11. Customer Segmentation LO6 • The process of breaking large groups of customers into smaller, more homogeneous groups • Generates a “profile” or picture of the customers’ similar demographic, geographic, and psychographic traits • Focuses on best customers

  12. Recency-Frequency-Monetary Analysis LO6 Identifies customers mostly like to purchase again Identifies and ranks “best customers” Identifies most profitable customers

  13. Lifetime Value Analysis A data manipulation technique that projects the future value of the customer over a period of years. PredictiveModeling A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future. Data Manipulation Techniques LO6

  14. Reinforcing customerpurchase decisions Campaign management Inducing product trialby new customers Retain loyalcustomers Cross-selling other products and services Increasing effectivenessof distribution channel marketing Designing targetedmarketing communications Improving customer service LO7 CRM Marketing Database Applications

  15. Retaining Loyal Customers Retaining 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 percent Loyalty programs reward loyal customers for making multiple purchases Loyalty programs provide information about customers and trends LO7

  16. 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 LO7

  17. InfrequentUsers • Offer direct incentives, such as a price discount • Offer more reinforcement of past purchase decisions ModerateUsers • Design around loyalty and reinforcement of purchase HeavyUsers LO7 Targeted Marketing Communications

  18. LO7 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

  19. RFID technology CRM Databases http://www.kidsdadsmoms.com Online Increasing Effectiveness ofDistribution Channel Marketing Multichannel Marketing LO7

  20. 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 LO7

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