LO 1 Define customer relationship management LO 2 Explain how to identify customer relationships with the organization LO 3 Understand interactions with the current customer base LO 4 Outline the process of capturing customer data Learning Outcomes
LO 5 Describe the use of technology to store and integrate customer data LO 6 Describe how to identify the best customers LO 7 Explain the process of leveraging customer information throughout the organization Learning Outcomes
What Is Customer Relationship Management? Define customer relationship management LO 1
Customer Relationship Management LO 1 A company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups.
Customer Relationship Management Strategy LO 1 Allows companies to tightly focus in on their target markets Link all processes of the company from its customers through its suppliers Foster customer-satisfying behaviors Encourage and track customer interaction with the company Organize the company around customer segments
According to an ex-marine and
retired Dell marketing executive:
In times of panic there is a lot of shooting going on and not enough aiming.
LO 1 Take Aim with Your Marketing Message Source: Casey Jones, “Go to War Against Wasted Marketing Spending: What Marines Can Teach CMOs About Success Under Fire,” Advertising Age, December 17, 2008.
LO 1 Breathe: Set aside time every week to focus on what your brand is communicating. Relax: The brand will not fail if you pause to focus. It may fail, however, if off-target marketing shots waste money. Aim: Make sure your marketing message is standardized and contain the essential elements listed on the slide. Squeeze: Apply Steady pressure. Shoot. Take Aim with Your Marketing Message On the rifle range, Marine recruits learn the acronym BRASS: B reathe, R elax, A im, S queeze, S hoot. Marketers can use BRASS to make the most of their marketing budget:
Aim to persuade:
Who is the target customer?
What is the target customer’s current perceptions of your brand?
In what context will the target customer make purchase decisions?
What do you want the target customer to think and feel after you communicate with him or her?
What are the minimum points you must communicate in order to achieve your goal?
LO 1 If it doesn’t persuade, don’t say it! Take Aim with Your Marketing Message
Customer Relationship Management Cycle Identify customer relationships Store and integrate customer data using IT LO 1 Capture customer data based on interactions Identify best customers Understand interactions with current customer base Leverage customer information
Implementing a CRM System LO 1 Key Points:
Customers take center stage
Business must manage the customer relationship across all points of customer contact
Customer Relationship Management LO 1
Identify Customer Relationships Explain how to identify customer relationships with the organization LO 2
Identify Customer Relationships Customer-Centric: LO 2 The company customizes its product and service offering based on data generated through interactions between the customer and the company. Generates long-lasting relationships
Identify Customer Relationships LO 2 Learning: An informal process of collecting customer data through customer comments and feedback on product or service performance.
Identify Customer Relationships LO 2 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 LO 2 Qualitative facts Customer actions Comments Experiential observations Collected Information Includes:
Empowerment LO 2 Empowerment: Delegation of authority to solve customers’ problems quickly. Usually solved by the first person that the customer notifies regarding the problem.
Training and Skill Development
Recognition and Rewards
Employee Growth Strategy
Compensation and Benefits Reviews
Resource and Workload Planning
SOURCE: Society for Human Resource Management and CRM Today LO 2 Empowering Employees
Identifying Customer Relationships LO 2
Understand Interactions of the Current Customer Base Understand interactions with the current customer base LO 3
Interactions of the Current Customer Base Customer LO 3 Requested Service Channel Past Relationship Current Transaction
Interactions of the Current Customer Base LO 3 Touch Points: Point of Sale Interactions: Communications between customers and organizations that occur at the point of sale, normally in a store. All possible areas of a business where customers communicate with that business
Interactions with Current Customer Base LO 3 Customer Web Point of Sale Kiosk Delivery, Installation Survey Product Registration
Capture Customer Data Outline the process of capturing customer data LO 4
Capture Customer Data LO 4 Store visits Conversations with salespeople Interactions via the Web Traditional phone conversations Wireless communications
Capturing Customer Data LO 4
Store and Integrate Customer Data Describe the use of technology to store and integrate customer data LO 5
Only useful if consistent and accurate.
Use information technology to capture, store and integrate important information (data warehousing)
Access vast amounts of information required to make decisions
LO 5 Customer Data
Store and Integrate Customer Data LO 5 Database Compiled list Response list Data Warehouse :::::::::::::::::::::::::::::::::::::::::: :::::::::::::::::::::::::::::::::::::::::: /////////////////////////////////////////////////////////// ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Identify the Best Customers Describe how to identify the best customers LO 6
Identifying the Best Customers Data Mining: A data analysis procedure that identifies significant patterns of variables and characteristics that pertain to particular customers or customer groups. LO 6
Identify and profile the best customers
Calculate their lifetime value
Predict purchasing behavior
Data Analysis LO 6 Predictive modeling Lifetime value analysis Recency-frequency-monetary analysis Customer segmentation
Identifies customers most likely to purchase again
Identifies and ranks “best customers”
Identifies most profitable customers
LO 6 Recency-Frequency-Monetary Analysis
Data Manipulation Techniques LO 6 Lifetime Value Analysis: Predictive Modeling: A data manipulation technique that projects the future value of the customer over a period of years. A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future.
Identify the Best Customers LO 6
Leverage Customer Information Explain the process of leveraging customer information throughout the organization LO 7
CRM Marketing Database Applications LO 7 Campaign management Retain loyal customers Cross-selling other products and services Designing targeted marketing communications Reinforcing customer purchase decisions Inducing product trial by new customers Increasing effectiveness of distribution channel marketing Improving customer service
Campaign Management Developing product or service offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships. LO 7
Campaign Management LO 7 Communicating offerings in a way that enhances customer relationships Developing customized offerings for appropriate segment Pricing these offerings attractively
Retaining Loyal Customers Loyalty programs reward loyal customers for making multiple purchases Retaining an additional 5 percent of customers increases profits by as much as 25 percent Improving customer retention by 2 percent can decrease costs by as much as 10 percent Loyalty programs provide information about customers and trends LO 7
Match product profiles to cross-sell products matching customer characteristics
Modify message to align with consumer relationships to the company’s products
Thank customers, update about order status, maintain strong relationship
Loyal customers cost less and spend more with the favored company
Using the Data LO 7
Targeted Marketing Communications Infrequent Users Moderate Users Heavy Users Offer direct incentives, such as a price discount Offer more reinforcement of past purchase decisions Design around loyalty and reinforcement of purchase LO 7
Using the Data
Use best customers’ data to profile ideal customer
Demographic and behavioral data locate strong potential customers
CRM helps manufacturers know who is actually buying their products.
RFID technology improves distribution, gathers info on product usage
Improves customer service
Wishlists, recommendations, remember purchase information
Build relationships on trust
Leveraging Customer Information
Retaining loyal customers
Cross-selling other products
Designing targeted marketing communications
Reinforcing purchase decisions
Inducing product trial by new customers
Increasing effectiveness of distribution channel marketing
Improving customer service
Marketing Information CRM Database Applications LO 7
Email Marketing Bumps Web site Traffic
Looking for return customers? Email marketing gets customers to click back. Being well-established, trusted, and easy makes email the ideal medium for marketers to get the word out. Online traffic is fairly simple to track, and using customer information gathered from online purchases offers businesses a relatively simple way to establish a relationship with customers.
Source: “Email marketing ‘a trusted method,’” www.directnews.co.uk, Wednesday November 11, 2009. LO 7