Mid term CRM ppt students 02-02-23 Part 2 (1).pptx
1. CUSTOMER
CHURN OUT
Customer churn is the percentage of customers that stopped using your company's product or service during a
certain time frame.
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4. Transactional Marketing Aspects Relationship Marketing
One off exchanges
Brand Management
Focus Ongoing exchanges
Customer Management
Short term focus Time Perspective Long term focus
Mass communication Primary Communication Personal communication
Isolated market research Customer Feedback
Mechanism
Ongoing Dialogue
Mass markets or market
segments
Market Size Markets of one
Market share Criterion for Success Mind share (share of
customers)
Profitability of transaction
Brand equity
Critical metrics Customer profitability
Customer equity
6. AWARENESS
This is the stage when each party
comes to attention of other as a
possible exchange partner.
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7. EXPLORATION
This is the stage of investigating or
getting to know more about the brand.
Some relationship may end a trial
stage.
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8. EXPANSION
You indulge into repeat purchases
with the brand and there is sense of
trust.
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9. COMMITMENT
You have trust on brand, you spread positive
WOM, followed by advocacy
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10.
11. THERE ARE
CASES OF
DISSOLUTION.
Customer may stop using the
brand, once he has been loyal
to due to diminishing quality,
increasing prices. Example,
Miniso or a some restaurants.
Sometime brands also leave
the customer. For example,
when customers become
creditors, black listed due to
unlawful activities or with timer
when they feel repeat purchase
is not happening
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13. WHAT IS THE B2B CONTEXT OF CRM?
FROM THE LENS OF IDIC
14. THE INDUSTRIAL
MARKETING AND
PURCHASING
TOOL (IMP)
The IMP school argues that B2B transactions occur within
the context of broader, long-term relationships, which are, in
turn, situated within a broader network of relationships.
The relationships that firms participate in can be many and
diverse, carried out for different purposes, with different
partners and have different levels of importance. These
relationships are conducted within a context of a much
broader network of relationships.
Transaction costs determined which supplier would be
chosen by a customer.
• Emerged in late 1970s
• European researchers
• Major contributors: Malcolm Cunninghan
and David Ford.
• Majorly from B2B context.
15. Actor bonds are
interpersonal
contacts between
actors in partner
firms that result
in trust,
commitment and
adaptation
between actors.
Activity links are
the commercial,
technical,
financial,
administrative
and other
connections that
are formed
between
companies in
interaction.
Resources are
the human,
financial, legal,
physical,
managerial,
intellectual and
other strengths
or weaknesses of
an organization.
Facilitators of IMP
16. THE NORDIC
SCHOOL
• The key idea advocated by the
Nordic school is that service is a
significant component of transactions
between suppliers and their
customers.
• Relationship marketing is the process
of identifying and establishing,
maintaining, enhancing, and, when
necessary, terminating relationships
with customers and other
stakeholders, at a profit, so that the
objectives of all parties involved are
met, where this is done by a mutual
giving and fulfillment of promise.
1. Came in late 1970s
2. Given by Christian Gronroos
3. In the context of B2C.
17. Interaction. Like the IMP school, the Nordic
school suggests that inter-firm exchanges occur in a
broader context of ongoing interactions. This is a
significant departure from traditional notions of marketing
where inter-firm exchanges are conceptualized as
discrete, unrelated events, almost as if there is no history.
Dialogue. Suppliers and customers are in dialogue with
each other. Indeed, communication between partners is
essential to the functioning of the relationship. Traditional
marketing thinking has imagined communication to be one-
way, from company to customer, but the Nordic school
emphasizes the fact that communication is bilateral.
Value. The concepts of value,
and value creation have become
more important to managers over
the past 20 years. The Nordic
school stresses the mutual
nature of value.
19. THE NORTH
AMERICAN
SCHOOL
A major theme flowing
through this school’s
work is the connection
between successful
inter-firm
relationships and
excellent business
performance. The
school acknowledges
that relationships
reduce transaction
costs, and that trust
and commitment are
two very important
attributes of successful
relationships.
• Significant contributors to this school
are Jeffery Dyer, Sandy Jap, Shelby
Hunt, Robert Dwyer, Jan Heide, Robert
Morgan and Jagdish Sheth.
20. Trust is underpinned by shared
values, communication, non-
opportunistic behavior, low
functional conflict and
cooperation.
Commitment, on the other
hand, is associated not only
with high relationship
termination costs, but also with
high relationship benefits.
21. THE ASIAN
(GUANXI )
SCHOOL Guanxi refers to the
informal social bonds
and reciprocal
obligations between
various actors that
result from some
common social
context, for example
families, friendships
and clan memberships.
• This philosophy for conducting business
and other interpersonal relationships in
the Chinese, and broader Asian,
context. Therefore, its effects have a
significant impact on how Asian
societies and economies work.
• Guanxi has been known to Western
business people since at least 1978.
22. CUSTOMER
LIFETIME VALUE
Customer lifetime value is the total amount of money a
customer is expected to spend with your business, or on your
products, during the lifetime of an average business
relationship.
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24. AVERAGE PURCHASE VALUE
For instance, if your business generated $20,000 revenue in a month from 200
sales, the APV for that period is $20,000 / 200 = $100.
25. AVERAGE PURCHASE FREQUENCY
If your business generated $20,000 in a year from 40 customers who collectively made 200
purchases, then the APF is 200 purchases / 40 customers = 5 times.
27. FINAL CALCULATION
With an Average Purchase Value of $100, an Average
Purchase Frequency of 5, and an Average Customer
Lifespan of 36 months, the Customer Lifetime Value is:
Average CLV = $100 * 5 * 36 = $18,000
29. GROSS MARGIN
For instance, if your total revenue generated per month is $20,000 and your COGS is
$8,000, you would first subtract the COGS from the revenue and get $20,000 – $8,000 =
$12,000.
Then, divide the resulting value by the total revenue (12,000 / 20,000 = 0.6) to arrive at a gross
margin of 0.6.
To represent gross margin as a percentage: 0.6 * 100 = 60%
31. COFFEE SHOP EXAMPLE
A coffee shop is a perfect starting example for CLV, as it is easy to understand even if you
don’t have an extensive business background. Let’s say a local coffee chain with three
locations has an average sale of $4. The typical customer is a local worker who visits two
times per week, 50 weeks per year, over an average of five years.
32.
33. CAR DEALERSHIP EXAMPLE
A car dealership has a much higher average sale amount with a lower purchase volume. In
this example, we'll assume someone buys a new car every five years for $30,000.
Customers are loyal to this brand and tend to keep buying from it for 15 years.
34.
35. SOFTWARE AS A SERVICE (SAAS)
SUBSCRIPTION
let’s assume an online video streaming service has multiple price plans, but the average
customer spends $17 per month. Customers typically subscribe for three and a half years
and use automatic monthly payments.
