Customer Relationship Management

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Customer Relationship Management

  1. 1. Customer Relationship Management Anshu Jalora, Ph.D. NMIMS, Mumbai
  2. 2. Course Objective• By the end of this course, the participants will be able to – Articulate what is Customer Relationship Management, Customer Lifetime Value – Distinguish between customer satisfaction and delight, and role of customer delight in long term relationship management – Develop a framework to classify and identify target customer segments, and how to best serve them – Recognize the significance of holistic marketing in CRM initiatives• Expectation – The participants will identify a set of action items to improve the CRM initiatives at their organizations Participate, share & co-learn, and have fun!! 11/21/2012 Dr. Anshu Jalora 2
  3. 3. Lets get started…• What is marketing?• What is Customer Relationship Management? – Customer care? – Door-to-door selling? Cold calls? – Customer order processing? – Loyalty?• Why is CRM important?11/21/2012 Dr. Anshu Jalora 3
  4. 4. Customer Relationship Management• CRM is a business strategy & philosophy encompassing marketing, sales, service, technology. It involves customer care.• CRM involves customer centric processes for identifying, acquiring, nurturing, retaining customers & developing lifelong relationships with them by providing best possible service & satisfaction in the process of achieving organizational goals.• CRM means two things – Knowing Your Customer (KYC) & “Appearing as one Entity” to the customers.• Taking a customer centric approach at all points of interactions with customers, leading to higher profitability.• Identify patterns in customer behavior and use information about individual customers to create marketing strategies which develop and sustain desirable customer relationships.11/21/2012 Dr. Anshu Jalora 4
  5. 5. Customer Centric View Direct and Indirect customers, life time value Value to Value of customers customers Acquisition, Retention, Up-sell strategies11/21/2012 Dr. Anshu Jalora 5
  6. 6. Think ‘Customer’11/21/2012 Dr. Anshu Jalora 6
  7. 7. Customer Relationship Cycle Development of Offering Targeting and Sales Marketing CR Cycle Retention Superior and Win- Experience Back11/21/2012 Dr. Anshu Jalora 7
  8. 8. Threadless.com Development of Offering Targeting and Sales Marketing CR Cycle Retention Superior and Win- Experience Back11/21/2012 Dr. Anshu Jalora 8
  9. 9. Development of OfferingTargeting and SalesMarketing CR Cycle Retention Superior and Win- Experience Back
  10. 10. Development of OfferingTargeting and SalesMarketing CR Cycle Retention Superior and Win- Experience Back
  11. 11. Give examples of post sales activities that leadto a positive experience for the customers. Development of Offering Targeting and Sales Marketing CR Cycle Retention Superior and Win- Experience Back11/21/2012 Dr. Anshu Jalora 11
  12. 12. How can you win back a lost customer? Development of Offering Targeting and Sales Marketing CR Cycle Retention Superior and Win- Experience Back11/21/2012 Dr. Anshu Jalora 12
  13. 13. Customer Scoring and Campaign Management Development of Offering Targeting and Sales Marketing CR Cycle Retention Superior and Win- Experience Back11/21/2012 Dr. Anshu Jalora 13
  14. 14. Customer Lifetime Value• CLV = profit contributions from all current and likely future purchases from the customer base – Good indicator of the sustainability – Gives a method to assess the fair market value of the company• CLV can be increased in three ways – Acquisition – Retention – Up-selling11/21/2012 Dr. Anshu Jalora 14
  15. 15. Acquisition• What would make a customer chose your product / service over others?• Are all customer same? Are their needs same? Are more customers better?• Acquisition funnel – Suspects, Prospects, Qualified prospects• Qualifying prospects – Segmentation / profiling (demographic & psychographic)• Select target segments – Size, growth, structural attractiveness, objectives and resources, and economies of scope11/21/2012 Dr. Anshu Jalora 15
  16. 16. Retention• Why are the reasons you might lose a customer?• Which is costlier, acquisition or retention? – Even if acquisition is less costly, when would you still like to retain?• What are the properties of good customer service?• How to win back a lost customer?• Focus retention initiatives on customers identified by – Recency criteria – Frequency criteria – Monetary criteria11/21/2012 Dr. Anshu Jalora 16
  17. 17. Customer Delight• Experience spectrum – Customer outrage and pain • Poor and unanticipated scenarios – Dissatisfaction • Expectations have not been met – Satisfaction • Expectations have been met – Delight • Fulfillment of unexpected, valuable, memorable, and positive events Kano Model11/21/2012 Dr. Anshu Jalora 17
  18. 18. Customer Delight• How companies delight their customers – Recognizing the importance of courtesy, empathy, and efforts in understanding customer needs – Finding exactly the right product / delivering unanticipated value – Refusing to be content with merely satisfying customers – Making sure that novelty and entertainment are provided – Focusing on multiple points of contact with customers – Repositioning the business to deliver “solutions,” as opposed to products and services11/21/2012 Dr. Anshu Jalora 18
  19. 19. Purchase Process Search Evaluate Options Options Problem Loyalty Purchase Recognition Post – Purchase Behavior11/21/2012 Dr. Anshu Jalora 19
  20. 20. Up-Sell• Increase the average ticket amount• Up-sell – Sell higher value products to the customers – Use demographic and psychographic data to identify right product for the right customer• Cross-sell – Database marketing (Collaborative filtering) • Direct mail marketing / email / tele marketing • Customization – Product bundling & promotions11/21/2012 Dr. Anshu Jalora 21
  21. 21. Where and How to use CRM?• Is the issue being addressed of strategic importance? – Long term view vs. short term / slightly better view• Where does it hurt? – Prioritize, because there is a lot that can be done. – Focus on ROI• Do we need perfect data? – Better to be roughly correct than precisely wrong! – What is the ROI on the level of precision?• Where do we go from here? – CRM reveals more than planned originally. Look out for newer opportunities.11/21/2012 Dr. Anshu Jalora 22
  22. 22. Common Reasons for the Failure of CRM• Implementing CRM technology before creating a customer strategy – Articulate the customer retention, acquisition, and up-selling strategy• Installing CRM technology before creating a customer-focused organization – Holistic marketing• Assuming that more CRM technology is better – It’s the strategy, not the technology that drives the results• Stalking, not wooing, customers – Relationship is mutual; contact customers in ways they value11/21/2012 Dr. Anshu Jalora 23
  23. 23. Appendix11/21/2012 Dr. Anshu Jalora 24
  24. 24. Marketing Mix by Stage Prospects First Time Buyers Early Repeat Buyers Core Customers DefectorsAdvertising Awareness Reinforcement Reinforcement Personal ApologySales Force Closers Personal Service Personal Service Personal Service Closers; personal ServicePricing Low Moderate Increasing Higher HigherPromotions Trial Similar to trial Limited Reward ApologyProduct Offerings Lead Second lead Add-on Add-on BroadCustomer Service Limited Problem-focused Problem-focused Personal attention Problem-focused 11/21/2012 Dr. Anshu Jalora 25

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