1chap. 20 marketing 7e lamb hair mcdaniel ©2004 south-western/thomson learning prepared by deborah...

1Chap. 20 Marketing 7e Lamb Hair McDaniel©2004 South-Western/Thomson Learning

Prepared byPrepared byDeborah BakerDeborah Baker

Texas Christian UniversityTexas Christian University

Chapter 20

Customer Relationship ManagementCustomer Relationship Management


Learning ObjectivesLearning Objectives

1. Define customer relationship management.

2. Explain how to establish customer relationships within the organization.

3. Explain how to establish and manage interactions with the current customer base.

4. Outline the process of acquiring and capturing customer data.


Learning Objectives Learning Objectives (continued)(continued)

5. Describe the use of technology to store and integrate customer data.

6. Describe how to analyze data for profitable and unprofitable segments.

7. Explain the process of leveraging and disseminating customer information throughout the organization.


Learning Objective Learning Objective

Define customer relationship management.

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On Linehttp://www.studentadvantage.com


Customer Relationship Customer Relationship ManagementManagement

A company-wide business

strategy designed to

optimize profitability,

revenue, and customer

satisfaction by focusing on

highly defined and precise

customer groups.

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Accomplishing Customer Accomplishing Customer Relationship ManagementRelationship Management

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 behaviorsFoster customer-satisfying behaviors

Encourage and track customer interactionwith the company

Encourage and track customer interactionwith the company

Organize the company around customer segments

Organize the company around customer segments

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Customer Relationship Customer Relationship Management CycleManagement Cycle

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Customers take center stage in any organization.

Business must focus on the day-to-day management of the customer relationship across all points of customer contact.

Key Assumptions in Key Assumptions in Implementing CRMImplementing CRM

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On Linehttp://www.ptcruiser.com



Explain how to establish customer relationships within the organization.

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Customer-Centric FocusCustomer-Centric Focus22

The company customizes

its product and service

offering based on data

generated through

interactions between the

customer and the company.


Establishing Customer Establishing Customer RelationshipsRelationships

Creates customized products and services based on data generated through interactions

Builds its system on what satisfies and retains valuable customers

Establishes relationships with customers similar to those of artisans of bygone years

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CRM and One-to-One CRM and One-to-One MarketingMarketing

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CRMCRM Company-wide

process that focuses on learning, managing customer knowledge, and empowerment.

Broad and Systemic

One-to-One MarketingOne-to-One Marketing Individualized marketing

method that utilizes customer information to build a long-term, personalized, and profitable relationship with each customer.

Focused and Individualized


Learning Learning in a CRM Environmentin a CRM Environment

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An informal process of

collecting customer data

through customer

comments and feedback on

product or service

performance.


Knowledge Management Knowledge Management in a CRM Environment in a CRM Environment

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The process by which learned

information from customers is

centralized and shared in

order to enhance the

relationship between

customers

and the organization.


Qualitative Facts about the CustomerQualitative Facts

about the Customer

ConclusionsConclusions

Learned LessonsLearned Lessons

CommentsComments

Experiential ObservationsExperiential Observations

CollectedCollectedInformation Information

Includes: Includes:

CollectedCollectedInformation Information

Includes: Includes:

22 Knowledge ManagementKnowledge Management


Empowerment Empowerment in a CRM Environment in a CRM Environment

22

Delegation of authority to

solve customers’ problems

quickly—usually by the

first person that the

customer notifies regarding

the problem.


InteractionInteraction22

The point at which a

customer and a company

representative exchange

information and develop

learning relationships.

The customer, not the organization, defines the terms

of the interaction.

The customer, not the organization, defines the terms

of the interaction.



Explain how to establish and manage interactions with the current customer base.

33


Customer-Centric Approach Customer-Centric Approach forfor

Managing Customer Managing Customer InteractionsInteractions

33


Touch Points in a CRM Touch Points in a CRM SystemSystem

33

All possible areas of a

business where customers

communicate with that

business.



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Customer registrationfor a particular service

Customer registrationfor a particular service

Completion of warranty card

Completion of warranty card

Communication withcustomer service

Communication withcustomer service

Customer discussions withsales, delivery, and installers

Customer discussions withsales, delivery, and installers

External External Touch PointsTouch Points

External External Touch PointsTouch Points



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Internal Internal Touch PointsTouch Points

Internal Internal Touch PointsTouch Points

Marketing Research, for developing profiles

Marketing Research, for developing profiles

Production,for analyzing problems

Production,for analyzing problems

Accounting,for establishing cost-control models

Accounting,for establishing cost-control models

Knowledge Center (call center)Knowledge Center (call center)


Interactions for Interactions for Customer-Centric Customer-Centric

OrganizationsOrganizations

Web-BasedInteractionsWeb-BasedInteractions

Point-of-SaleInteractions


Transaction-BasedInteractions

Transaction-BasedInteractions

New and UniqueNew and UniqueInteractions toInteractions to

Obtain Customer Obtain Customer DataData

New and UniqueNew and UniqueInteractions toInteractions to

Obtain Customer Obtain Customer DataData

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On Linehttp://www.kroger.com

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Web-BasedInteraction

Web-BasedInteraction



Communications between customers and organizations

using Web vehicles.

Communications between customers and organizations

using Web vehicles.

Communications between customers and organizations that

occur at the point of sale, normally in a store.

Communications between customers and organizations that

occur at the point of sale, normally in a store.

Transaction-Based

Interactions

Transaction-Based

Interactions

The exchange of information that occurs between the company and

the company at the point of the actual transaction.

The exchange of information that occurs between the company and

the company at the point of the actual transaction.

Interactions for Interactions for Customer-Centric Customer-Centric

OrganizationsOrganizations



Outline the process of acquiring and capturing customer data.

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Guidelines for Data Use in aGuidelines for Data Use in aCRM SystemCRM System

44

1. Customers take center stage in the organization.

2. Customer information must be centralized.

3. Information is retained over the customer’s life span.

4. Information must define the products and services, the customer’s product preferences, and contact methods for interaction.


Guidelines for Data Use in aGuidelines for Data Use in aCRM SystemCRM System

44


Channels for Acquiring DataChannels for Acquiring Data44

A medium of

communication through

which the customer

interacts with a business at

an external touch point; the

traditional approach for

acquiring information

from customers.


Channels for Acquiring DataChannels for Acquiring Data44

Store VisitsStore Visits

Conversations with SalespeopleConversations with Salespeople

Interactions via the WebInteractions via the Web

Traditional Phone ConversationsTraditional Phone Conversations

Wireless CommunicationsWireless Communications


TransactionTransaction44

An interaction between a

company and a customer

involving an exchange of

information as well as an

exchange of products or

services. Contact InformationContact Information

Current Relationshipwith Organization

Current Relationshipwith Organization

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On Linehttp://www.geico.com


Product and ServiceProduct and Service44

Various BrandsVarious Brands

Package TypesPackage Types

Time to ConsumeTime to Consume

Price PaidPrice Paid

Preferred Transaction TypePreferred Transaction TypeKey CustomerKey Customer

DataDataKey CustomerKey Customer

DataData



Describe the use of technology to store and integrate customer data.

55


Data WarehouseData Warehouse

A central repository for data

from various functional areas

of the organization that are

stored and inventoried on a

centralized computer system

so that the information can be

shared across all functional

departments of the business.

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Operational Components ofOperational Components ofData WarehouseData Warehouse

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Customer-InitiatedCustomer-InitiatedComponent Component

Customer-InitiatedCustomer-InitiatedComponent Component

Information-AccessInformation-AccessComponentComponent

Information-AccessInformation-AccessComponentComponent

System-ManagementSystem-ManagementComponentComponent

System-ManagementSystem-ManagementComponentComponent

Stores and categories data initiated by the customer Stores and categories data initiated by the customer

Provides for classification of customer data and broadaccess to data

Provides for classification of customer data and broadaccess to data

Defines and interprets data in a longitudinal mannerDefines and interprets data in a longitudinal manner

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On Linehttp://www.aa.com



Describe how to analyze data for profitable and unprofitable segments.

66


Data MiningData Mining

A data analysis procedure

that identifies significant

patterns of variables and

characteristics that pertain to

particular customers or

customer groups.

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Capabilities of Data MiningCapabilities of Data Mining66

Automated prediction of trends and behaviors

Automated discovery of previously unknown patterns


ModelingModeling

The act of building a model in

a situation where the answer

is know and then applying the

model to another situation

where the answer is unknown.

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Critical Factors for SuccessCritical Factors for Successwith Data Miningwith Data Mining

A large, well-integrated data warehouseA large, well-integrated data warehouse

A well-defined understanding of how the end result of the activities will be used and leveraged throughout the organization

A well-defined understanding of how the end result of the activities will be used and leveraged throughout the organization

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Explain the process of leveraging and disseminating customer information throughout the organization.

77


Leveraging and Disseminating Leveraging and Disseminating Customer InformationCustomer Information

Data mining leverages knowledge to Data mining leverages knowledge to identify the most profitable customersidentify the most profitable customersData mining leverages knowledge to Data mining leverages knowledge to

identify the most profitable customersidentify the most profitable customers

Marketing strategies are designed to Marketing strategies are designed to penetrate these segmentspenetrate these segments

Marketing strategies are designed to Marketing strategies are designed to penetrate these segmentspenetrate these segments

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On Linehttp://www.americanexpress.com


Campaign ManagementCampaign 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.

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Campaign ManagementCampaign Management77

Campaign Campaign ManagementManagement

Achieves Achieves Personalization Personalization

by:by:

Campaign Campaign ManagementManagement

Achieves Achieves Personalization Personalization

by:by:

Communicating offerings in a wayCommunicating offerings in a waythat enhances customer relationshipsthat enhances customer relationships

Communicating offerings in a wayCommunicating offerings in a waythat enhances customer relationshipsthat enhances customer relationships

Developing customized Developing customized offerings for appropriate segmentofferings for appropriate segment

Developing customized Developing customized offerings for appropriate segmentofferings for appropriate segment

Pricing these offeringsPricing these offeringsattractivelyattractively

Pricing these offeringsPricing these offeringsattractivelyattractively

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On Linehttp://www.kidsdadsmoms.com