Week 2: CRM and Customer Journey Management

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Required Readings
1. Buttle, F., & Maklan, S. (2019). Customer relationship management : Concepts
and technologies (Fourth edition.). Routledge
― Chapter 3 (Managing the Customer Journey: Customer Acquisition)
― Chapter 4 (Managing the Customer Journey: Customer Retention and
Development)
2. What Is Salesforce Customer 360?
(https://www.youtube.com/watch?v=RH76W0jtnOE&ab_channel=Salesforce)
3. Chernev, A. (2023). Remove Boredom and Frustration from Your Customer
Journey: Too many companies prioritize efficiency over the customer
experience. Harvard Business Review Digital Articles, 1–7.
4. De Freitas, J. (2023). What Is the Optimal Pattern of a Customer
Journey? Harvard Business Review Digital Articles, 1–11.

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What is Customer Relationship Management (CRM)?
• “An integrated approach to identifying, acquiring and retaining
customers”
• “An integrated information system that is used to plan, schedule
and control the pre-sales and post-sales activities”
• “Embraces all aspects of dealing with prospects and customers,
including the call center, sales force, marketing, technical support
and field service”
• “Primary goal …. is to improve long term growth and profitability
through a better understanding of customer behavior”
• “A business strategy that maximizes profitability, revenue and
customer satisfaction by ….. implementing customer-centric
processes”

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What is CRM? (cont.)
IDIC Model (Peppers & Rogers, 1995)
• Identify + Differentiate + Interact + Customize
― Identify customers
― Differentiate valuable and profitable customers
― Interact and build relationships
― Customize offerings and communications

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Why build relationships?
• To address the Increasing consumer diversity and demand
― Demographic diversity
― Cultural-behavioral changes
― Technology advancement (e.g., digital channels, big data)
― Demand for personalization
― Corporate social responsibility and privacy concern
― Competition and the need for differentiation

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Why build relationships? (cont.)
• To reduce marketing costs
― Customer retention is cheaper than acquiring new customers
• More and better customer insights
― Better relationships give better understanding of behavior
― Better understanding of customer behavior ➔ better strategies
➔ increase customer spending ➔ increase revenue and profit

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Why build relationships? (cont.)
• To increase customer lifetime value (CLV)
― CLV – revenue from a customer across his/her lifespan with the
company
― Identify and prioritize the most valuable customers
― Better targeting and positioning
― Understand customers with low lifetime value
― Cheaper to retain loyal customers
― Loyal customers have good referral value

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What is Strategic CRM?
• Customer-centric business strategy/culture that aims at delivering
values to profitable customers
• Managing values
― Designing and delivering core value propositions of products
and/or services
• Managing experience
― Understanding and optimizing customers’ exposure and
interaction with company’s marketing resources

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What is Strategic CRM? (cont.)
• Value management
― Value: customers’ perception of the benefit-cost ratio
▪ Value-in-exchange (i.e., firms embed values in products,
which are exchanged for money)
▪ Value-in-use (i.e., benefits customers receive by using the
products)
▪ Value-in-experience (i.e., values created for customers
during their consumption process: pre-purchase, purchase,
post-purchase)

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What is Strategic CRM? (cont.)
• Value creation through personalization/customization
― Being aware and responsive to customers’ differential needs and
wants through the marketing mix (7Ps)
▪ Do customers want personalized communication, products,
and/or services?
▪ What degree of personalization is desired?
▪ Will customer pay a premium for the personalization?

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What is Strategic CRM? (cont.)
• Experience management
― Utilizing marketing resources (e.g., platforms, technologies,
procedures, communication, personnel)
― Touchpoints – wherever customers come into contact with your
physical and/or digital channels (e.g., retail store, salespersons,
website, social media, search engine, mobile app, email, events,
loyalty program)

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What is Strategic CRM? (cont.)
• Touchpoint experience
― Effectiveness
▪ How effective is this touchpoint in offering values to
customers?
― Ease
▪ Is this touchpoint easy to use by customers?
― Emotion
▪ How does this touchpoint contribute to customers’ emotions
during the interaction?
― Engagement
▪ How does this touchpoint facilitate customers’ engagement
with the brand?

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What is Operational CRM?
• Integration and automation of marketing and customer-facing
operations
• Marketing cloud
― Horizontal integration aims to connect customer journey stages
― Vertical integration aims to connect touchpoints within each
journey stages
― Data integration aims to connect internal and external data
points
― Intelligence integration aims to assess and optimize customer
experience continuously

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What is Operational CRM? (cont.)

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What is Operational CRM? (cont.)

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What is Operational CRM? (cont.)

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What is Operational CRM? (cont.)

Operational
CRM

Customer Experience

User persona Customer journey

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What is user persona?
• A fictional character that represents your ideal customer
• User persona is NOT customer segment
― Segmentation – classifying the population into groups based on
specific characteristics (e.g., demographic, geographic,
psychographic, behavioral)
― User persona – individual profile of a customer

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User persona examples

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User persona examples (cont.)

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User persona examples (cont.)

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User persona examples (cont.)

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What is user persona? (cont.)
• Questions to answer when designing user persona:
― Who is this user?
― What does his/her daily life look like?
― What are his/her needs, wants, and expectations?
― What are his/her interests and goals?
― What are the challenges or pain points as he/she is perusing
these goals?
― Why is this person important to your brand?

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Customer Journey
• The process through which a consumer interacts with physical
and/or digital touchpoints built by a company

Do I need a new
sofa?
Let me do some
search online

My sofa is almost worn out

Let me ask my family

Let me visit the and friends for
physical stores recommendation

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Customer journey mapping
• Customer journey map – “a diagram that illustrates the steps your
customer(s) go through in engaging with your company, whether it
be a product, an online experience, retail experience, or a service, or
any combination” (Harvey Business Review, 2010)
• Traditional stages of a customer journey
― Awareness ➔ Consideration ➔ Purchase ➔ Retention ➔
Loyalty
― Pre-purchase ➔ Purchase ➔ Post-purchase

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Customer journey mapping (cont.)
• At each of these stages……
― What this consumer is trying to achieve?
― Which touchpoints this consumer will come across?
― What information and experience this consumer need and want?
― What are the potential challenges this consumer will face?
― What are the opportunities for your brand?

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Customer journey mapping (cont.)

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