1. The Nature of Customer Relationship Management

2. The Nature of CRM The Concept of Relationship Management
Customer Relationship Management
The CRM as a Hub of Applied Learning
Potential Costs and Benefits of CRM Systems

3. I. The Concept of Relationship Management
major goal of organizations—engage in interactions with customers over the long-term
The function of an enterprise’s marketing activities
(Case) Local butcher
Things learned from successful small firms

4. I. The Concept of Relationship Management
In summary, a business must focus on both getting and keeping customers
It is the marketer’s job to use the resources of the entire organization to create, interpret, and maintain the relationship with the customer
There is a gap between academic and practitioner-oriented experts

5. II. Customer Relationship Management
Definitions of CRM
Simplest form (Two dimensions)
Formally (Business strategy)
a business strategy that uses information technology to provide the enterprise with a comprehensive, reliable, and integrated view of its customer base so that all processes and customer interactions help maintain and expand mutually beneficial relationships
(Case) USAA

6. III. The CRM as a Hub of Applied Learning
concept of marketing—a philosophy or a way of envisioning an organization as an integrated system where all aspects work to satisfy customer needs, at a profit, within society’s long-term best interests
Exhibit 1.1: The CRM Process as a Hub of Applied Learning
Good technology without good psychology is a loser’s formula

7. IV. Potential Costs and Benefits of CRM Systems
4-1 Potential returns of CRM systems
4-2 Potential benefits of CRM systems to the organization
4-3 Potential costs of CRM systems to the organization
4-4 Potential benefits of CRM systems for customers
4-5 Potential costs of CRM systems for customers
4-6 Lifetime Value of the relationship

8. 4-1 Potential returns of CRM systems
best customers—a proportion of all customers in an industry who provide profitable interactions, cost little to care for, and who tend to spread positive word-of-mouth information about the organization
Exhibit 1.2: Potential Costs and Benefits of CRM Systems

9. 4-2 Potential benefits of CRM systems to the organization
customer focus—the organization is ready to view the purchasing process from the customer’s point of view, to empathize with the customer’s feelings, and to treat the customer’s information with great care
customer retention—the organization satisfies customers and/or offers variety such that the customer comes back and repeats transactions
share of customer/share of wallet—the organization wants to please customers to the point that they want the organization to sell them something else
cross-selling—the marketing of complementary products to existing customers
bundling—a combination of products is sold as a bundle at a price lower than the total of the individual prices

10. 4-3 Potential costs of CRM systems to the organization
IT infrastructure—the processing capacity required to fulfill customer needs.
process change—an alteration in the habitual pattern for accomplishing a task

11. 4-4 Potential benefits of CRM systems for customers
continuity—a stable connection or linkage
contact or touch points—the customer can communicate and explain his or her needs; examples include the telephone, , point-of-purchase, customer service desk, or mail, to name a few
personalization—the organization knows the customer, by name, knows the customer’s normal purchasing routine, and can forecast the customer’s needs

12. 4-5 Potential costs of CRM systems for customers
privacy—confidentiality or a feeling that you can have some space to yourself where other people cannot intrude
opportunity cost—missed chances for a customer to benefit from or to associate with other offers from competitive sources

13. 4-6 Lifetime value of the relationship
the net benefit to each party in an exchange over the length of time that interactions occur
Exhibit 1.3: Customers Occur in all Phases of the Supply Chain