1. Customer Relationship Management Strategies
Chapter 4

2. Customer Relationship Marketing
Why do some companies succeed?
Collaborative advantage “

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

4. Relationship Marketing

5. Relationship Marketing
Transactional exchange
Definition
Distant exchanges
One of many suppliers
Few operational linkages
What’s an operational linkage?

6. Relationship Marketing
Collaborative exchange
Definition
Work closely together
Value-adding exchanges
Attracting customers Maintaining customers

7. Relationship Marketing
Nature of relationships
Transactional
Standardized
Competitive bidding
Collaborative exchange
Customized product
Work together through linkages
Relationship commitment
Trust
Reliability and integrity

8. Relationship Marketing
Transactional
Collaborative
Availability of Alternatives
Supply Chain Dynamism
Importance of Purchase
Complexity of Purchase
Information Exchange
Operational Linkages

9. Relationship Marketing
Strategy Guidelines
Match purchasing situations and supply chain conditions for each customer!
Collaborative
How to handle?
Transactional

10. Measuring Customer Profitability
Common mistake
Two factors must be present for differentiation to work
Activity Based Costing
Aggregate v. Individual firms
Unlocking Customer Profitability
20/80 rule
Corollary
Big companies are usually most profitable or least profitable

11. Measuring Customer Profitability
Managing High- and Low-Cost-to-Serve Customers
What makes some customers expensive?
Look inside first
Sharper profit lens
See next slide

12. Measuring Customer Profitability

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

14. Customer Relationship Management
“Cross-functional process for achieving
continuing dialogue with customers
across all their contact and access points, with
personalized treatment of the most valuable customers
to ensure customer retention and the effectiveness of marketing initiatives”

15. Customer Relationship Management
Develop Customer Strategy, THEN choose software
Five Steps for Customer Strategy
Acquiring the right customers
Crafting the right value proposition
Instituting best processes
Motivating employees
Learning to retain customers

16. Customer Relationship Management
Acquiring the Right Customers
Look at current and potential customers
Balance desired level of relationship with profitability of doing so
Choosing accounts
Three factors
How do they define value?
Look at profit potential

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

18. Customer Relationship Management

19. Customer Relationship Management
Industry bandwidth
The strategies competing firms in an industry pursue
Flaring out by unbundling
Flaring out with augmentation
Create Flexible Service Offering

20. Customer Relationship Management
Instituting the Best Practices
Salespeople
Others
Motivating Employees
Why?
How?
Retaining Customers
Growth from existing customers
Evaluate relationships

21. Gaining an Advantage at CRM
Customer-Relating Capability
Orientation toward relationships
Customer retention is a shard goal
Organizational members act quickly on info received from customers
All employees understand and appreciate the lifetime value of a customer
Employees have considerable latitude when taking actions
Information about relationships
Configuration
Org. structure and performance measures

22. Gaining a Position of Advantage
What works best?