1. Customer Relationship Management Key Concepts

2. Customer Relationship Management Strategy Link all processes of the company from its customers through its suppliers Link all processes of the company from its customers through its suppliers Foster customer-satisfying behaviors Encourage and track customer interaction with the company Organize the company around customer segments

3. Customer Relationship Management Cycle Identify customer relationships Store and integrate customer data using IT Capture customer data based on interactions Identify best customers Understand interactions with current customer base Leverage customer information

4. Implementing a CRM System Key Points: 1.Customers take center stage 2.Business must manage the customer relationship across all points of customer contact

5. Customer Relationship Management

6. Identify Customer Relationships The company customizes its product and service offering based on data generated through interactions between the customer and the company. Customer-Centric

7. Identify Customer Relationships An informal process of collecting customer data through customer comments and feedback on product or service performance. Learning

8. Identify Customer Relationships The process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization. Knowledge Management

9. Qualitative facts Customer actions Comments Experiential observations Collected Information Includes:

10. Empowerment Delegation of authority to solve customers’ problems quickly— usually by the first person that the customer notifies regarding the problem. Empowerment

11. Identifying Customer Relationships

12. Interactions of the Current Customer Base Requested Service Channel Past Relationship Current Transaction Customer

13. Interactions of the Current Customer Base Touch Points All possible areas of a business where customers communicate with that business. Point-of-Sale Interactions Point-of-Sale Interactions Communications between customers and organizations that occur at the point of sale, normally in a store.

14. Interactions with Current Customer Base Web Point of Sale Kiosk Delivery, Installation Survey Product Registration Customer

15. Capture Customer Data Store visits Conversations with salespeople Interactions via the Web Traditional phone conversations Wireless communications

16. Capturing Customer Data

17. Store and Integrate Customer Data Database Compiled list Response list Data Warehouse :::::::::::::::::::::::::::::::::::::::::: \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ /////////////////////////////////////////////////////////// ~~~~~~~~~~~~~~~~~~~~~~~~~~

18. Identifying the Best Customers Data Mining Data Mining A data analysis procedure that identifies significant patterns of variables and characteristics that pertain to particular customers or customer groups.

19. Data Mining  Identify and profile the best customers  Calculate their lifetime value  Predict purchasing behavior  Amazon.com great at it

20. Data Analysis Predictive modeling Lifetime value analysis Recency-frequency-monetary analysis Customer segmentation

21. Recency-Frequency-Monetary Analysis 1.Identifies customers most likely to purchase again 2.Identifies and ranks “best customers” 3.Identifies most profitable customers

22. Data Manipulation Techniques Lifetime Value Analysis Predictive Modeling A data manipulation technique that projects the future value of the customer over a period of years. A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future.

23. Identify the Best Customers

24. CRM Marketing Database Applications How to Use Info Effectively LO 7 Campaign management Retain loyal customers Cross-selling other products and services Designing targeted marketing communications Reinforcing customer purchase decisions Inducing product trial by new customers Increasing effectiveness of distribution channel marketing Improving customer service

25. Campaign Management Developing product or service offerings customized for the appropriate customer segment and then pricing and communicating these offerings for the purpose of enhancing customer relationships.

26. Campaign Management Communicating offerings in a way that enhances customer relationships Developing customized offerings for appropriate segment Pricing these offerings attractively

27. Retaining Loyal Customers LO 7 Loyalty programs reward loyal customers for making multiple purchases Retaining an additional 5 percent of customers increases profits by as much as 25 percent Improving customer retention by 2 percent can decrease costs by as much as 10 percent Loyalty programs provide information about customers and trends Loyalty programs provide information about customers and trends

28. Targeted Marketing Communications Infrequent Users Moderate Users Heavy Users Offer direct incentives, such as a price discount Offer more reinforcement of past purchase decisions Design around loyalty and reinforcement of purchase

29. Increasing Effectiveness of Distribution Channel Marketing Multichannel Marketing CRM Databases RFID technology

30. REVIEW LEARNING OUTCOME Leveraging Customer Information  Campaign management  Retaining loyal customers  Cross-selling other products  Designing targeted marketing communications  Reinforcing purchase decisions  Inducing product trial by new customers  Increasing effectiveness of distribution channel marketing  Improving customer service Marketing Information CRM Database Applications