The document discusses customer relationship management strategies. It defines relationship marketing as activities directed at establishing, developing and maintaining successful relationships with customers. There are two types of exchanges - transactional and collaborative. Collaborative exchanges involve working closely together through operational linkages to provide value-adding experiences that help attract and maintain customers. The document also discusses measuring customer profitability, identifying profitable vs unprofitable customers, and gaining a competitive advantage through strong customer relationship capabilities.

1. Customer Relationship ManagementCustomer Relationship Management
StrategiesStrategies
Faculty Development ProgramFaculty Development Program
Madurai Kamaraj UniversityMadurai Kamaraj University
17 March 201817 March 2018
Dr Chitra CDr Chitra C
MentorMentor
Chanakya CreatorsChanakya Creators
Mobile : 9843144975Mobile : 9843144975
Email : drchitraprakash@yahoo.comEmail : drchitraprakash@yahoo.com

2. Customer Relationship MarketingCustomer Relationship Marketing
 Why do some companies succeed?Why do some companies succeed?
 Collaborative advantageCollaborative advantage

3. Relationship MarketingRelationship Marketing
 ““All activities directed towardAll activities directed toward
establishing, developing, andestablishing, developing, and
maintaining successful changes withmaintaining successful changes with
customers and other constituents.”customers and other constituents.”
 Why?Why?

4. Relationship MarketingRelationship Marketing

5. Relationship MarketingRelationship Marketing
 Transactional exchangeTransactional exchange
• DefinitionDefinition
• Distant exchangesDistant exchanges
• One of many suppliersOne of many suppliers
• Few operational linkagesFew operational linkages
 What’s an operational linkage?What’s an operational linkage?

6. Relationship MarketingRelationship Marketing
 Collaborative exchangeCollaborative exchange
• DefinitionDefinition
• Work closely togetherWork closely together
 Value-adding exchangesValue-adding exchanges
• Attracting customersAttracting customers MaintainingMaintaining
customerscustomers

7. Relationship MarketingRelationship Marketing
 Nature of relationshipsNature of relationships
• TransactionalTransactional
 StandardizedStandardized
 Competitive biddingCompetitive bidding
• Collaborative exchangeCollaborative exchange
 Customized productCustomized product
 Work together through linkagesWork together through linkages
 Relationship commitmentRelationship commitment
 TrustTrust
• Reliability and integrityReliability and integrity

8. Relationship MarketingRelationship Marketing
TransactionalTransactional CollaborativeCollaborative
Availability ofAvailability of
AlternativesAlternatives
Supply ChainSupply Chain
DynamismDynamism
Importance ofImportance of
PurchasePurchase
Complexity ofComplexity of
PurchasePurchase
InformationInformation
ExchangeExchange
OperationalOperational
LinkagesLinkages

9. Relationship MarketingRelationship Marketing
 Strategy GuidelinesStrategy Guidelines
• Match purchasing situations and supplyMatch purchasing situations and supply
chain conditions for each customer!chain conditions for each customer!
• CollaborativeCollaborative
 How to handle?How to handle?
• TransactionalTransactional
 How to handle?How to handle?

10. Measuring Customer ProfitabilityMeasuring Customer Profitability
 Common mistakeCommon mistake
• Two factors must be present for differentiationTwo factors must be present for differentiation
to workto work
 Activity Based CostingActivity Based Costing
• Aggregate v. Individual firmsAggregate v. Individual firms
 Unlocking Customer ProfitabilityUnlocking Customer Profitability
• 20/80 rule20/80 rule
• CorollaryCorollary
• Big companies are usually most profitable orBig companies are usually most profitable or
least profitableleast profitable

11. Measuring Customer ProfitabilityMeasuring Customer Profitability
 Managing High- and Low-Cost-to-Managing High- and Low-Cost-to-
Serve CustomersServe Customers
• What makes some customersWhat makes some customers
expensive?expensive?
• Look inside firstLook inside first
• Sharper profit lensSharper profit lens
 See next slideSee next slide

12. Measuring Customer ProfitabilityMeasuring Customer Profitability

13. Measuring Customer ProfitabilityMeasuring Customer Profitability
 Identifying Profitable CustomersIdentifying Profitable Customers
• Location on chartLocation on chart
• How to maintain?How to maintain?
 Identifying Unprofitable CustomersIdentifying Unprofitable Customers
• Location on chartLocation on chart
• How to improve the situation?How to improve the situation?
• Fire customers?!Fire customers?!
 Why?Why?
 How?How?

14. Customer RelationshipCustomer Relationship
ManagementManagement
 ““Cross-functional process forCross-functional process for
achievingachieving
• continuing dialogue with customerscontinuing dialogue with customers
• across all their contact and accessacross all their contact and access
points, withpoints, with
• personalized treatment of the mostpersonalized treatment of the most
valuable customersvaluable customers
• to ensure customer retention and theto ensure customer retention and the
effectiveness of marketing initiatives”effectiveness of marketing initiatives”

15. Customer RelationshipCustomer Relationship
ManagementManagement
 Develop Customer Strategy, THENDevelop Customer Strategy, THEN
choose softwarechoose software
 Five Steps for Customer StrategyFive Steps for Customer Strategy
• Acquiring the right customersAcquiring the right customers
• Crafting the right value propositionCrafting the right value proposition
• Instituting best processesInstituting best processes
• Motivating employeesMotivating employees
• Learning to retain customersLearning to retain customers

16. Customer RelationshipCustomer Relationship
ManagementManagement
 Acquiring the Right CustomersAcquiring the Right Customers
• Look at current and potential customersLook at current and potential customers
• Balance desired level of relationship withBalance desired level of relationship with
profitability of doing soprofitability of doing so
• Choosing accountsChoosing accounts
 Three factorsThree factors
 How do they define value?How do they define value?
 Look at profit potentialLook at profit potential

17. Customer RelationshipCustomer Relationship
ManagementManagement
 Crafting the Right Value PropositionCrafting the Right Value Proposition
• Value proposition- “the products,Value proposition- “the products,
services, ideas, and solutions that aservices, ideas, and solutions that a
business marketer offers to advance thebusiness marketer offers to advance the
performance goals of the customerperformance goals of the customer
organization.”organization.”
• Look at industry- what are others doing?Look at industry- what are others doing?

18. Customer RelationshipCustomer Relationship
ManagementManagement

19. Customer RelationshipCustomer Relationship
ManagementManagement
• Industry bandwidthIndustry bandwidth
 The strategies competing firms in anThe strategies competing firms in an
industry pursueindustry pursue
• Flaring out by unbundlingFlaring out by unbundling
• Flaring out with augmentationFlaring out with augmentation
• Create Flexible Service OfferingCreate Flexible Service Offering

20. Customer RelationshipCustomer Relationship
ManagementManagement
 Instituting the Best PracticesInstituting the Best Practices
• SalespeopleSalespeople
• OthersOthers
 Motivating EmployeesMotivating Employees
• Why?Why?
• How?How?
 Retaining CustomersRetaining Customers
• Why?Why?
• Growth from existing customersGrowth from existing customers
• Evaluate relationshipsEvaluate relationships

21. Gaining an Advantage at CRMGaining an Advantage at CRM
 Customer-Relating CapabilityCustomer-Relating Capability
• Orientation toward relationshipsOrientation toward relationships
 Customer retention is a shard goalCustomer retention is a shard goal
 Organizational members act quickly on info receivedOrganizational members act quickly on info received
from customersfrom customers
 All employees understand and appreciate the lifetimeAll employees understand and appreciate the lifetime
value of a customervalue of a customer
 Employees have considerable latitude when takingEmployees have considerable latitude when taking
actionsactions
• Information about relationshipsInformation about relationships
• ConfigurationConfiguration
 Org. structure and performance measuresOrg. structure and performance measures

22. Gaining a Position of AdvantageGaining a Position of Advantage
 What works best?What works best?

23. Customer Relationship ManagementCustomer Relationship Management
StrategiesStrategies
Faculty Development ProgramFaculty Development Program
Madurai Kamaraj UniversityMadurai Kamaraj University
17 March 201817 March 2018
Dr Chitra CDr Chitra C
MentorMentor
Chanakya CreatorsChanakya Creators
Mobile : 9843144975Mobile : 9843144975
Email : drchitraprakash@yahoo.comEmail : drchitraprakash@yahoo.com