The document discusses the evolution of relationship marketing and customer relationship management (CRM), emphasizing the importance of building long-term, profitable relationships with customers and partners in a competitive landscape. It highlights strategies for customer retention, creating customer value, and managing customer relationships effectively, while also addressing the significance of digital advancements and ethical considerations in modern marketing. Additionally, it outlines customer classification based on profitability and loyalty to optimize marketing efforts.

1. 17 September 2009

2. Outlines Relationship marketing Customer relationship management Changing nature of customer Capturing value from customer The marketing landscape

3. Relationship Marketing Development and maintenance of long term cost effective exchange relationship with customer , suppliers and other partners of organization. Long tem commitment Customer focus Competitive advantage

4. Customer Relationship Management (CRM) The overall process of building and maintaining profitable customer relationship by delivering superior customer value and satisfaction . It deals with Acquiring Retaining Growing customer

5. CRM cont … .. Customer Value The difference between the total customer value and total cost. Customer Satisfaction The extend to which product perceived performance matches a buyer expectation. Performance < Expectation dissatisfied Performance = Expectation satisfied Performance > Expectation highly satisfied

6. Customer Relationship Levels and Tools Companies can build customer relationship at many levels depending on nature of target market. With low margin customer Through sales promotion, advertisement contact phone number and websites. With high level margin customer Develop customer loyalty and retention program beyond offering high level value and satisfaction. They use special tools.

7. Changing Nature Of Customer Relationship Relating with more carefully selected customer Relating for long term Relating directly Partner relationship management Partners inside the company Partners outside the company

8. Relating With More Carefully Selected Customer Most marketers realize that they do not want relationship with every customer instead companies now are targeting fewer more profitable customer. They assess value of customer to firm (Selective Relationship Marketing) Customer profitability analysis. At the same time companies are finding the new ways to deliver more value to customer.

9. Relating For Long Term Today companies are going beyond designing strategies to attract new customer and create transactions with them, they are using CRM to attract, retain and build profitable long term relationship. New view of Marketing is the art and science of finding, retaining and growing profitable customer.

10. Why Companies Emphasis This Increase in competition Overcapacity in many industries Increase in number of sellers On average it cost 5 to 10 times as much to attract a new customer as it does to keep a current customer satisfied.

11. Relating directly Many companies are also connecting more directly. Today customer can buy virtually any product without going to store through Telephone Mail order Online using web Business purchasing agent routinely shop on web for items ranging from standard office supplies to high priced equipment.

12. Partner Relationship Management Marketers realize that they cannot they cannot go alone. They must work with variety of marketing partners in addition to being good at CRM They also must good in Partners relationship management. “ Working closely with partners in other company departments and outside the company to jointly bring greater value to customer ”

13. Partners Inside Company Old Thinking Marketing is done only by marketing, sales and customer support people. New Thinking Every department can interact with customer and today all departments linking together to create customer value. Company is unable to obtain its long term objective until its all departments work together.

14. Partners Outside The Company How marketers connect with supplier, channel partners and competitors. Channel partners are Distributors Wholesaler Retailer Today suppliers are not treated as venders and distributors are not as customers. They all treated as partners in delivering customer value.

15. Capturing value from customer Creating customer loyalty and retention Growing share of customer Building customer equity Building right relationship with right customer

16. Creating Customer Loyalty And Retention Customer lifetime value “ The value of the entire stream of purchases that the customer would make over a life time. ” Highly satisfied customer buy again and also tell other about the product. Companies realize that losing a customer means losing more than a single customer. In means losing the stream of purchases that he would make over a life time.

17. Growing Customer Share Share of customer The portion of the customer ’ s purchasing that a customer gets in its product categories. Market share The % of target market that company is capturing in the industry. Marketers spend less time in thinking to increase market share and spend more time to increase share of customer by Offering greater value Cross selling and up selling

18. Building Customer Equity “ The total combined customer life time value of all the company ’ s customers. ” This is a better measures of performance than current sale and market share.

19. Building Right Relationship With Right Customer Customers are assets and need to be managed and maximized, but not all customer or even not all loyal customer Some loyal customer can be unprofitable Some disloyal customer can be profitable Company can classify customer according to the potential profitability and loyalty and manage relationship accordingly.

20. Building Right Relationship With Right Customer High profitability Low profitability profitability Loyalty Short term customer Long term customer Butterflies Good fit between company’s offering and customer’s need: high profit potential True friends Good fit between Company’s offering and Customer need: highest profit potential Strangers Little fit between Company’s offering and Customer’s need: lowest Profit potential Barnacles limited fit between Company’s offering and Customer need: low profit potential

21. The new Marketing Landscape The new Digital age Internet Globalization Call for more ethics and social Responsibilities