Crm ch6


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Crm ch6

  2. 2. THE EVOLUTION OF RELATIONSHIP MARKETING PROGRAMS Exhibit 6.1: Aspects of Relationship Programs Financial Relationships: Frequent Buyer Programs  financial incentives-- discounts, product upgrades, or prizes that serve as rewards for customers who exhibit loyalty or who frequently purchase from the organization Social Bonding  a friendly companionship or an affective tie such as that experienced by Saturn owners who gather to meet other owners Structural-Interactive Relationships  use system design to solve problems, reinforce purchases, and recognize the importance of each customer 2
  3. 3. EXHIBIT 6.1 ASPECTS OF RELATIONSHIP PROGRAMSRelational facet Organizational implications Frequent flyer/reader/buyer/vistor…rewards Discounts, product upgrades, awards, prizesFinancial incentives Related products or providers expand the net Increased customer loyalty to price, incentives Friendly companionship, trust…connections Personal insights, recognition, mutual affectionSocial bonding Interpersonal interactions expand the link Increased customer loyalty to the organization Systemic mass personalization…management Mass personalization, cultivation, stimulationStructural-interactions Artificial intelligence continues the connections Increased customer loyalty 3 the experiences to
  4. 4. THE COMPLETE CRM FOR RETAINING CUSTOMERS Customer Life Cycle  the stages a customer goes through from the time before deciding to do business with an organization until he or she decides to stop being a customer Exhibit 6.2: Picturing the Customer Life Cycle acquisition stage— the customer completes the initial transactional exchange retention stage— implying that the customer is a loyal advocate or at least intends to repeat another exchange with the same organization winback stage— the organization will take special steps to have a customer enter into another exchange with the organization, if the expected lifetime value is strong enough 4
  5. 5. EXHIBIT 6.2 PICTURING THE CUSTOMER LIFE CYCLE Acquisition Retention Winback Suspect Loyal advocate Prospect Repeat Customer : customer 1st transaction Inactive regular customer Lost customer 5
  6. 6. Customer Retention Strategy a plan identifying what basic retention objectives will be pursued and how they will be achieved in the time available  attrition rate or churn— the percentage of customers lost in a given period, typically a year  retention rate— the percentage of customers expected to keep doing business with the organization, calculated as 1- the attrition rate Exhibit 6.3: Reasons for Lost Customers welcome strategy— acknowledges the organization’s appreciation for the initiation of a relationship or for the exchange, in essence, a thank you  cognitive dissonance— a psychologically uncomfortable post- purchase feeling or "buyers remorse," that can follow a commitment to purchase 6
  7. 7. EXHIBIT 6.3 REASONS FOR LOST CUSTOMERS A need, due to satiation, or a drive, due to thrill-seeking, or anNovelty seeking intellectual curiosity that causes people to choose variety over timeDissatisfaction The actual performance(s) fell short of expectations The customer perceives a higher benefit value associated with anRelative advantage alternative choice and believes it to be more grathifying A disagreement in which the customers and the companys viewsConflict seem to be incompatible The customer has no confidence that the organization can reliablyLoss of trust fulfill its promisesCease to need The product or solution is no longer required 7
  8. 8. Customer Retention Strategy reliability— the organization can repeat the exchange time and time again with the same satisfying results responsiveness— the organization shows customers it really cares about their needs and feelings  internal marketing— public relations efforts aimed at employees who have contact with the ultimate consumer or who have a direct effect on the consumer’s satisfaction with the product recognition— special attention or appreciation that identifies someone as having been known before personalization— the organization can use its CRM system to tailor promotions and products to the specific customer, often using offer engines to use customer data to create an offer or message that is appropriate to the individual 8
  9. 9. Access Strategy and Customer- Initiated Communication defines how customers will be able to interact with the organization, the ease of contact, returning products, talking with support services communication— the process of exchanging information with and conveying meaning to others Exhibit 6.4: Traditional Communication Process  customer- initiated communication process—the traditional receiver, that is the customer to whom information is to be communicated, begins the process by searching for information Exhibit 6.5: Customer Initiated Communication  priority access— customers are provided with a special number or another channel to gain quick access to the organization 9
  10. 10. EXHIBIT 6.4 TRADITIONAL COMMUNICATION PROCESS Noise NoiseSource encodes Message Channel Receiver decodes Feedback Noise 10
  11. 11. EXHIBIT 6.5 CUSTOMER-INITIATED COMMUNICATION Receiver Identifies Searches Channel (s) subject (customer) matter Decodes Source Multiple(organization) messages Encodes 11
  12. 12. Access Strategy and Customer- Initiated Communication rewards program— provides the best customers with preferential treatment or special incentives such as priority access, thank you gifts, or other incentives partnership management programs— customers can earn additional points by making purchases from other organizations, such as linkages between airlines, hotels, and rental car companies Switching Costs  financial penalties, time loss, or psychological barriers to exit a program 12
  13. 13. Problem Identification and Management proactive approach to allowing customers to voice concerns to the organization through surveys, mystery shoppers, or other means Conflicts and Customer Complaint Management  levels of dissatisfaction-- range from a mild displeasure to ranging anger  attribution theory— people look for explanations for events and occurrences that they experience—why did this occur?  cost/benefit perception— when the expected benefits of complaining are high and the expected costs are low, organizations are more likely to hear from dissatisfied customers  Personal characteristics 13
  14. 14. WHAT TO DO WHEN CUSTOMERS COMPLAIN? Be Customer-Centric  understand the situation from the customer’s point of view Express Regret  apology—I am truly sorry this problem occurred Resolve Conflict  conflict— a disagreement in which the views of the customer and the organization appear to be incompatible  accommodation— a settlement of a conflict that emphasizes cooperative behavior.  compromise— an attempt to find a mutually acceptable middle ground that is somewhat satisfactory to both parties  termination— the organization or the customer ends the relationship and sees no hope of resolving the conflict Follow-Up and Prevent Recurrence  Feedback- the training of employees and strategy input for managers 14 KEEPING IN TOUCH AND LISTENING TO VOICE OF CUSTOMERS