Managing the Customer Lifecycle

Customer Acquisition

customer segments  Customer development – Developing customer value  Customer retention – Retaining existing customers . Customer Lifecycle Management Process  Customer acquisition – Acquiring new customers.

Customer Lifecycle Management Process  Customer acquisition – Prospects to be targeted – Reaching prospects – Making suitable offers  Customer development – Developing customer value  Customer retention – Retaining existing customers .

Customer Acquisition  New customer types: – New to product category – necessitated by: • Family lifecycle stage • Change in circumstances – School to college – Gets a job after degree • Products needed to 'live good life' – New to company • Won from competitors • More chllenging in service offerings due to high switching costs • Customers exhibiting portfolio purchasing behaviour .

Family Life Cycle One adult HH Bachelor I Bachelor II Bachelor III Two adult HH Young couple Childless couple Older couple Two adult + Full Full Delayed Children HH Nest Nest Full Nest I II III Youngest child age (<6) (>6) (<6) One adult + SP I SP II SP III Children HH Age of person <35 years 35 to 64 years >64 years SP: Single parent .

Customer Value Estimates  Not all prospects have similar potential. The choice may depend on: – Estimated value of the customer: margins earned from the customer's purchases over a given time period – If the customer switches to company/brand. what proportion of category spending will the company earn? – Probability of customer switching  “Conversion Model” developed by Jan Hofmeyer and Rice .

Prospecting Customers of Value  B2B: – Trade journals – Industry exhibitions. search engines and trade portals – Directories – Tender notices – Customers approaching suppliers by themselves . trade shows – Seminars and conferences – Response to advertisements – Internet: URL.

comprehension. reach and frequency • Recall. evoking feelings and intention to buy • Ad effectiveness through coupon response – Sales promotion – Word of mouth (who recommneded?) . Prospecting Customers of Value  B2C: – Advertisements • Copy/Message • Media: target segment.credibility.

Sales Promotion Activities Activity Consumer Industrial Distributor Salespeople Contests Trips Bonuses Prizes Advt support Freebies Recognition Coupons Rebates Cash Exhibitions Demonstration .

email. Prospecting Customers of Value  B2C: – customer referral schemes (CRS) • Member-get-member • Recommend-a-friend – Merchandising (slotting. display) – Event sponsorhips – Direct: mail catalogues. sms. cold calls – Product placements and product integration – Sales persons in retail outlets (salesforce) .

Making the Right Offer  B2B: – Solutions within customer budget – Scope for upgradation  B2C: – Entry level products with attractive prices for customer acquisition – Up-selling and cross-selling – 'Loss leaders' in retail .

Customer Acquisition Performance Indicators  Number of customers acquired – New types – Repeat types  Cost per acquired customers – Direct identifiable from CRS – Other general communications  Value of acquired customers .

Operational CRM Tools for Customer Acquisition  Lead management – SFA (Sales Force Automation) for B2B  Camapaign Management – B2C media planning – RFM matrix  Event Management – Life stage events – Public events .

Support from CRM Analytics  B2B: – Comparitively simpler situations as number of customers limited – In the case of standard components analytics will be based on industry/region  B2C: – Statistical methods are used to derive segmentwise trends in case of product offerings – Affiliation memberships may guide customer acquisition process .