MGT 3604 CUSTOMER RELATIONSHIP

MANAGEMENT

CHAPTER 8
COPING WITH CHALLENGING CUSTOMER

1
 LEARNING OBJECTIVES

• To discuss on how to control the quality of

relationship data used to avoid challenging
customers
• To discuss on how to profile challenging
customers
• To discuss the data-mining techniques

Last Updated: © LMS SEGi education group 2

Monday, October 3, 2022
 LEARNING OUTCOMES

• Students will be able to identify the quality

customer database
• Students will be able to analyze the
customer database to avoid coping with
challenging customers.

Last Updated: © LMS SEGi education group 3

Monday, October 3, 2022
CUSTOMER IDENTIFICATION

• Successful relationship data management

required all the relevant data from all sorts of
database, both inside or outside company being
compiled into one data warehouse, in order to
create an identity for customer which is easily
& quickly accessible so that employees from
different locations & positions can provide real
assistance for customer.
• Actions could easily be taken to overcome
challenging customers.
CUSTOMER IDENTIFICATION
Relationship data used to
identify a customer:
• Basic data – name,
address, sex, co. name
• Supplementary data –
D.o.B / D.o.R., nationality,
contact no
• All these data is used by
the entire company & it’s
part of infrastructure of
the company.
CUSTOMER IDENTIFICATION
• In consumer markets –
have to determine whether a
customer is individual or
household.
• In business markets – have
to be recorded with regard to
the holding company, the
division, business unit &
contact person (P.I.C)
DATA QUALITY OPERATIONALIZED

• Complete
• Within the record; Within the universe
• Current
• Up-to-date
• Correct
• Form; Content; Valid vs. Correct; integrity
• Unique
• No duplicates?
EXPANDING THE SIZE OF DATABASE

Response via own channel

• Thro multichannel communication – most of the

response can be collected thro direct comm with

prospect & customers.
• People may ask to identify themselves before they

may be assisted via internet or telephone

(example: register to open email acct). However
the quality of the data may varies as relatively high
number of people do not fill internet forms
correctly.
EXPANDING THE SIZE OF DATABASE

• In call center, the names, address, city will be filled

by CS agents – its time consuming but the agents
can help to clarify the info and filled it correctly.
• Customer info also can be collected via Coupon &
forms filled in thro direct response ad.
• Info also can be collected thro
member-get-member campaign
• It’s important to keep track of the
data quality that come thro
various channels
CUSTOMER PROFILING

• The data collected involve a description that is

made up of customers’ fixed characteristics –
within a scope of CRM, a further profiling of
customer is desirable.
• It is necessary to be able to describe customer
as ‘buyer’, ‘user’ & person’
CUSTOMER PROFILING

Measuring data characteristic

• An ideal customer profile will have to form the
foundation, one which is indispensable to be
able to implement the planned relationship
policy.
• We usually choose not to keep all of the ‘raw’
data, but instead to revise them into a better &
more easily maintained customer profile.
CUSTOMER PROFILING

Data are classified into 3 types in marketing:

• Recency data – indicate the date of
customer’s last purchase.
• Frequency data – related to the number of
transaction & payment customers have
made since a certain time within a certain
period.
• Monetary data – the value of all of the
orders & payments within a certain period.
CUSTOMER PROFILE
Aspect Characteristics

Segment In which segment should customer be placed?

Customer value Annual turnover;

Contribution to profit on annual basis
Lifetime value – the value of customer for total
expected period that he/she is a customer of ours.
Transactions Turnover or profit contributions of purchases
Description of purchases
Payment behavior – method of payment
Products Which product has customer purchased, in which
qtty & at which time?
When the warranty period expire?
CUSTOMER PROFILE
Aspect Characteristics

Comm thro Which address customer used to log in?

internet Which page did customer use to enter the site?
What was the duration of the visit?
Communication When, which topics & on whose initiative has
by telephone contact been made by telephone?
Who was/were the contact person within company?
Other Which mailing did customer receive & when did
communication he/she receive? How did he/she respond to these?
When & to which direct response ad did customer
respond?
What is the customer’s preference for certain
communication channels (in specific situation)?
CUSTOMER PROFILE
Aspect Characteristics

Satisfaction Customer’s satisfaction with products, services,

communication.
General satisfaction with the supplier
Customer Identification data
Characteristics Type of residence, city
Household composition, income, education, socio-
economic class
Lifestyle or values
Industry code, nature of company activities
Size of company
DATA SOURCES

Internal
• Contact database of the contact centre in which the
comm history is maintained.
• Product database in which the product ownership is
registered
• Transaction database in which the purchase, delivery,
invoicing & payment info is recorded.
• Sales info system
• Marketing database which keep tract of mailings,
customers’ potential product interests, customers’
preparedness to receive info from supplier.
DATA SOURCES
External
• Service providers that set up databases
containing characteristics of natural persons &
legal entities.
• Data from these databases
may be rented or purchased
for the purpose of enriching
customer databases.
CONCLUSION

• The foundation of customer data is formed by

the data which may be used to identify
customers.
• The quality of these data must be controlled –
current, complete, correct & unique.
• The relevant master data must be further
supplemented by other data from internal &
external sources in order to enrich the customer
profile