Sub: Management Topic: Customer Relationship Management
Question:
Review the examples of Customer Relationship Management (CRM) characteristics found in the
table below. In your own words describe at least three activities that represents each
characteristic of a CRM plan; share of customer, lifetime value of a customer, customer equity
or high-value customers.
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Share of Customer
Lifetime Value of Customer
Customer Equity
Focusing on High-Value Customers
Solution:
Customer Relationship Management (CRM)
Characteristic CRM Activity
Share of Customer 1. Create enduring relationships with consumers, by
satisfying their needs in the best way possible
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Sub: Management Topic: Customer Relationship Management
2. Direct marketing leveraging techniques such as e-mail
campaigns, direct mailers and other customer
engagement methods so that we can form a one to one
association with the customer
3. Increasing customer loyalty by implementing various
customer loyalty programs such as reward points,
frequent flyer programs etc
1. Lifetime value of a customer is a benchmark for how
much a business be should be willing to invest to acquire
a customer.
2. Determining the nature of customer relationships
(Retention/Migration)
Lifetime Value of Customer
3. Finding out the amount of money spent on the
customer throughout his relationship with the company
4. Find out the total amount of money that the customer
spent over a number of transactions with the company
5. Subtracting 3 from 4 to arrive at a value that would give
the amount that a company can spend on acquiring a
new customer
6.
1. Customer Equity is the Net Present Value of a customer
from the perspective of a company
Customer Equity 2. Determine which of the three drivers—value, brand or
retention equity—are most critical to driving customer
equity in their industry and firm focus on that
3. Quantify the financial benefit from improving one or
more of the drivers.
4.
Focusing on High-Value
1. Define high value customers in terms of customer equity
Customers and lifetime value
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Sub: Management Topic: Customer Relationship Management
2. Segregate the customers into high value and low value
customers based on profitability
3. Identify needs and core benefits that the high value
customers look for in the product
4. Concentrate on satisfying these needs the most; even at
the cost of low value customers
5. Maintain close relationships and communication with
the high value customers by means of targeted
promotional campaigns, key accounts, exclusive
customer clubs etc.
** End of the Solution **
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Finance, Marketing, Statistics, Economics and others. Check out more solved problems in our Solution Library.
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*The Homework solutions from ClassOf1 are intended to help the student understand the approach to solving the problem and not for submitting
the same in lieu of your academic submissions for grades.