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B&S – Buying & Selling RM – Relationship Marketing CIMS – Customer Information Management Systems CRM – Customer Relationship Management e-CRM- A subset of CRM that focuses on enabling customer interactions via e-channels (The web, email and wireless)
Customer Relationship Management (CRM) is the process of carefully managing detailed information about individual customers and all customer “touch points” to maximize customer loyalty. It costs a company dramatically less to retain and grow an existing client, than it does to court new ones. It is said that “It is seven times more expensive to acquire a new customer than to keep an existing one.”
A Customer Database is an organised collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for such marketing purposes as lead generations, lead qualifications, sale of a product or service, or maintenance of customer relationship. Database Marketing is the process of building, maintaining, and using customer databases and other databases (products, suppliers, resellers) to contact, transact, and build customer relationship.
Data mining is the principle of sorting through large amounts of data and picking out relevant information. Customer relationship Management form a learning relationship with the customers by noticing their needs and preferences with the use of Data warehouses and learn how to serve them with the use of Data mining.
How do you get people to provide this?
History of contacts Transaction history or summary Response to marketing communications
How did you hear about us (this offer?)
Platinum Heavy, reliable users, not pricesensitive, try new products, loyal Gold Large users who push for price breaks, shop around and not so loyal Iron Low volume or intermittent users; cost to serve them is quite high Lead Demanding, want special attention but don’t buy much and show no loyalty
Attracting new customers Quicker and more efficient response to customer leads and customer information Simplification of marketing and sales processes Understanding customer needs Better customer service Building customer loyalty
Organizational wise change of priority to customers Significant investment of time and money Threatens management’s control/power struggle Heightens people’s resistance to change Inappropriate integration leads to disaster
All forms of trading
Direct Traditional Retail E-commerce Wholesale Combination
Telephony & telemarketing Internet Mobile, SMS Digital TV Cable & satellite
Information in the system can be accessed and entered by employees in different departments)
Sales Marketing Customer service Training Professional development Performance management Human resource development
Details on any customer contacts can also be stored in the system
The rationale behind this approach is to improve services provided directly to customers To use the information in the system for targeted marketing and sales purposes
Many inter-related aspects
Front office operation Back office operations Business relationships Analysis
Direct interaction with customers
Face to face meetings Phone calls E-mail Online services etc
Operations that ultimately affect the activities of the front office
Billing Maintenance Planning Marketing Advertising Finance Manufacturing
Interaction with other companies and partners
Suppliers/vendors Retail outlets/distributors Industry networks (lobbying groups, trade assn’)
This external network supports front and back office activities
Key CRM data can be analyzed in order to plan
Target-marketing campaigns Conceive business strategies Judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability)
Three key phases
1. Customer Acquisition 2. Customer Retention 3. Customer Extension
Three contextual factors
4. Marketing Orientation 5. Value Creation 6. Innovative IT.
Attracting our customer
For the first purchase We have acquired our customer
Market orientation, innovative IT & value creation Aim is to increase the number of customers that purchase from us for the FIRST TIME
Our customer returns and buys for a second time This is most likely to be the purchase of a similar product or service, or the next level of product or service.
Market orientation, innovative IT & value creation Aim is to increase the number of customers that purchase from us REGULARLY
Additional, supplementary purchases
Our customers are regularly purchasing We introduce products and services to our loyal customers different from original purchase Once purchased, our goal is to retain them as customers for the extended products or services
Market orientation, innovative IT & value creation Aim is to increase the number of customers that purchase ADDITIONAL products
Focused upon the three levels of needs of customers
Actual, tangible product Core product and its benefit Also the augmented product such as a warranty and customer service
Basic Product Expected Product Augmented product Potential Product
Generation of shareholder value
Based upon the satisfaction of customer needs (as with marketing orientation) Delivery of a sustainable competitive advantage
Efficient, speedy and focus upon customer needs Whilst IT and/or software are not the entire story for CRM, it is vital to its success CRM software collects data on consumers and their transactions Organizations will track individuals, and try to market products and services to them based upon similar buyer behavior seen in other individuals
1. Validation 2. Discovery 3. Action
Ensuring that the data you have on your customers is not only correct Also, in a suitable state for targeting communications programs
Use of data mining techniques
To find relationships that you did not know existed Sometimes conventional analysis is impaired by your own natural assumptions and prejudices Discovery techniques help to solve these issues by starting from ground zero They simply search for relationships in the database against a set of objectives
Your customers and prospects need to have the right messages communicated to them Quality Inter-Action drives quality Trans-Action This is done with a Campaign Management tool that can automatically select the right targets and the right messages via the right channels The responses are then fed back into the Validation process for evaluation and refinement
CRM is corporate strategy composed of applications, technology and products that fulfill three essential requirements
1. Organization perspective 2. Customer perspective 3. Front office staff perspective
360° view of each customer
For consistent and unified contact with that customer whenever anyone anywhere in the enterprise deals with that customer This knowledge increases the opportunities for sales and the effectiveness of customer service
2. Customer perspective
Customers to have a consistent view
To enable your customers to have a consistent view of your enterprise, regardless of the way the customer contacts you This improves customer satisfaction and customer retention
To enable front office staff to perform sales, service and marketing tasks more efficiently as a team Increasing expertise and reducing costs
Business starts with the acquisition of customers However, any successful CRM initiative is highly dependent on a solid understanding of customers
Demographics, purchase patterns & channels Segmentation to identify logical unique groups Primary research to capture needs and attitudes Customer valuation to understand profitability
Based on the value customers are expected to deliver
Products, services, channels and media can be customized based on the needs of quantitative customer segments
Based on the potential value delivered by customer segment
Not just through marketing, sales and media Distribution, shipping, customer service & online
Delivering value is a cornerstone Factors including quality, convenience, speed, ease of use, responsiveness and service excellence
Learning about customers makes it easy to identify those producing the greatest value
Maintain interaction; Deliver on value Customers change as they through differing life stages Modify the service
Pizza with specified toppings Take 10 minutes Come in a packed box Remain warm till you reach home Charges – standard and acceptable price Pizza will taste reasonably good
You will come back is all the above are met
If you go regularly
Rapport with employees You forgive if they mess up with one or two
Degree of confidence determines tolerance
If using first time, and even one expectation is
You will never go again
Deliver on all expectations Give you a garlic bread FREE !
You will tell everyone about it
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