chapter 19copyright ©2010 cengage learning inc. all rights reserved 1 mktg designed by amy mcguire,...
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Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 1
MKTG
Designed byAmy McGuire, B-books, Ltd.
Prepared byDana Freeman, B-books, Ltd.
Lamb, Hair, McDaniel 2009-2010 Custom
er Relation
ship Manage
ment (CRM)
19
CHAPTER
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 2
Learning Outcomes
Define customer relationship management
Explain how to establish customer relationships within the organization
Understand interactions with the current customer base
Outline the process of capturing customer data
LO1
LO2
LO3
LO4
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 3
Learning Outcomes
Describe the use of technology to store and integrate customer data
Describe how to identify the best customers
Explain the process of leveraging customer information throughout the organizationLO7
LO6
LO5
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 4
Define customer relationship management
What Is Customer What Is Customer Relationship Management?Relationship Management?
LO1
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 5
LO1
Customer Relationship Management
A company-wide business
strategy designed to optimize
profitability, revenue, and
customer satisfaction by
focusing on highly defined
and precise customer groups.
CustomerRelationshipManagement
CustomerRelationshipManagement
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 6
LO1
Customer RelationshipManagement Strategy
Link all processes of the company from its customers through its suppliersLink all processes of the company from its customers through its suppliers
Foster customer-satisfying behaviorsFoster customer-satisfying behaviors
Encourage and track customer interaction with the companyEncourage and track customer interaction with the company
Organize the company around customer segmentsOrganize the company around customer segments
Online
http://www.crmdownload.com
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 7
LO2B
eyond
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Take Aim with Your Marketing Message
According to an ex-marine and retired Dell marketing executive:
In times of panic there is a lot of shooting going on and not enough aiming.
Source: Casey Jones, “Go to War Against Wasted Marketing Spending: What Marines Can Teach CMOs About Success Under Fire,” Advertising Age, December 17, 2008.
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 8
LO2B
eyond
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Take Aim with Your Marketing Message, cont.
On the Marine Corps rifle range, recruits are taught the acronym BRASS: breathe, relax, aim, squeeze, shoot. Marketers, too, can use this technique to make the most of their marketing budget (their arsenal):
1. Breathe: Set aside time every week to focus on what your brand is communicating.
2. Relax: Remember that the brand will not fail if you pause for a moment to focus. It may fail, however, if you continue to waste marketing shots that are off-target.
3. Aim: Make sure your marketing message is standardized and contain the essential elements listed on the slide.
4. Apply Steady pressure.5. Shoot.
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 9
LO2B
eyond
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Take Aim with Your Marketing Message, cont.
Aim to persuade: Who is the target customer? What is the target customer’s current perceptions of
your brand? In what context will the target customer make
purchase decisions? What do you want the target customer to think and
feel after you communicate with him or her? What are the minimum points you must
communicate in order to achieve your goal?
If it doesn't persuade, don't say it!
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 10
LO1
Customer Relationship Management Cycle
Identify customer relationshipsIdentify customer relationships
Store and integrateStore and integratecustomer data using ITcustomer data using IT
Capture customer data Capture customer data based on interactionsbased on interactionsIdentify best customersIdentify best customers
Understand interactions Understand interactions with current customer basewith current customer base
Leverage customerLeverage customerinformationinformation
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 11
LO1
Implementing a CRM System
Key Points:
1. Customers take center stage
2. Business must manage the customer relationship across all points of customer contact
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 12
REVIEW LEARNING OUTCOMELO1
Customer Relationship Management
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 13
Explain how to establish customer relationships within
the organization
Identify Customer RelationshipsIdentify Customer RelationshipsLO2
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 14
Identify Customer Relationships
LO2
The company customizes its
product and service offering
based on data generated
through interactions between
the customer and the company.
Customer-CentricCustomer-Centric
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 15
Identify Customer Relationships
LO2
An informal process of
collecting customer data
through customer comments
and feedback on product or
service performance.
LearningLearning
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 16
Identify Customer Relationships
LO2
The process by which learned
information from customers is
centralized and shared in order
to enhance the relationship
between customers and the
organization.
KnowledgeManagement
KnowledgeManagement
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 17
Knowledge Management
LO2
Qualitative facts Qualitative facts
Customer actionsCustomer actions
CommentsComments
Experiential observationsExperiential observations
CollectedCollectedInformation Information
Includes: Includes:
CollectedCollectedInformation Information
Includes: Includes:
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 18
Empowerment
LO2
Delegation of authority to solve
customers’ problems quickly—
usually by the first person that
the customer notifies regarding
the problem.
EmpowermentEmpowerment
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 19
LO2B
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Empowering Employees
Training and Skill Development
Communication Development
Recognition and Rewards
Employee Growth Strategy
Compensation and Benefits Reviews
Resource and Workload Planning
Performance Appraisals
Career Planning
SOURCE: Society for Human Resource Management and CRM Today
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 20
REVIEW LEARNING OUTCOMELO2
Identifying Customer
Relationships
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 21
Understand interactions
with the current customer base
Interactions of the Interactions of the Current Customer BaseCurrent Customer BaseLO3
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 22
Interactions of the Current Customer Base
LO3
Requested Service
Channel PastRelationship
CurrentTransaction
Customer
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 23
Interactions of the Current Customer Base
LO3
Touch PointsTouch PointsAll possible areas of a business
where customers communicate
with that business.
All possible areas of a business
where customers communicate
with that business.
Point-of-SaleInteractions
Point-of-SaleInteractions
Communications between customers and organizations thatoccur at the point of sale, normally in a store.
Communications between customers and organizations thatoccur at the point of sale, normally in a store.
Online
http://www.bestbuy.com
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 24
REVIEW LEARNING OUTCOMELO3
Interactions with Current Customer Base
WebWeb
Point of SalePoint of Sale
KioskKiosk
Delivery, InstallationDelivery, Installation
SurveySurvey
Product RegistrationProduct Registration
Customer
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 25
Outline the process of capturing
customer data
Capture Customer DataCapture Customer DataLO4
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 26
LO4
Capture Customer Data
Store visitsStore visits
Conversations with salespeopleConversations with salespeople
Interactions via the WebInteractions via the Web
Traditional phone conversationsTraditional phone conversations
Wireless communicationsWireless communications
Online
http://www.geico.com
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 27
REVIEW LEARNING OUTCOMELO4
Capturing Customer Data
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 28
Describe the use of technology to store
and integrate customer data
Store and Integrate Store and Integrate Customer DataCustomer Data
LO5
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 29
REVIEW LEARNING OUTCOMELO5
Store and Integrate Customer Data
DatabaseDatabase
Compiled listCompiled listResponse listResponse list
Data Warehouse
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\///////////////////////////////////////////////////////////~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 30
Describe how to identify the best
customers
Identifying the Best CustomersIdentifying the Best CustomersLO6
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 31
Identifying the Best Customers
LO6
DataMining
DataMining
A data analysis procedure
that identifies significant
patterns of variables and
characteristics that pertain to
particular customers or
customer groups.
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 32
Data Mining
LO6
Identify and profile the best customers
Calculate their lifetime value
Predict purchasing behavior
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 33
Data Analysis
LO6
Predictive modelingPredictive modeling
Lifetime value analysisLifetime value analysis
Recency-frequency-monetary analysisRecency-frequency-monetary analysis
Customer segmentationCustomer segmentation
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 34
Recency-Frequency-Monetary Analysis
LO6
1. Identifies customers most likely to purchase again
2. Identifies and ranks “best customers”
3. Identifies most profitable customers
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 35
Data Manipulation Techniques
LO6
Lifetime Value Analysis
PredictiveModeling
A data manipulation technique that projects the future value of the customer over a period of years.
A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future.
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 36
REVIEW LEARNING OUTCOME
LO6
Identify the Best
Customers
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 37
Explain the process of leveraging customer information
throughout the organization
Leverage Customer Leverage Customer InformationInformationLO7
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 38
CRM Marketing Database Applications
LO7
Campaign managementCampaign management
Retain loyalcustomers
Retain loyalcustomers
Cross-selling other products and services
Cross-selling other products and services
Designing targetedmarketing communications
Designing targetedmarketing communications
Reinforcing customerpurchase decisions
Reinforcing customerpurchase decisions
Inducing product trialby new customers
Inducing product trialby new customers
Increasing effectivenessof distribution channel
marketing
Increasing effectivenessof distribution channel
marketing
Improving customer service
Improving customer service
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 39
Campaign Management
LO7
CampaignManagement
CampaignManagement
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.
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 40
Campaign Management
LO7
Communicating offerings in a waythat enhances customer relationships
Communicating offerings in a waythat enhances customer relationships
Developing customized offerings for appropriate segment
Developing customized offerings for appropriate segment
Pricing these offeringsattractively
Pricing these offeringsattractively
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 41
Retaining Loyal Customers
LO7
Loyalty programs reward loyal customers for making multiple purchasesLoyalty programs reward loyal customers for making multiple purchases
Retaining an additional 5 percent of customers increases profits by as much as 25 percentRetaining an additional 5 percent of customers increases profits by as much as 25 percent
Improving customer retention by 2 percent candecrease costs by as much as 10 percentImproving customer retention by 2 percent candecrease costs by as much as 10 percent
Loyalty programs provide information about customers and trendsLoyalty programs provide information about customers and trends
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 42
Targeted Marketing Communications
LO7
InfrequentUsers
ModerateUsers
HeavyUsers
• Offer direct incentives, such as a price discount
• Offer more reinforcement of past purchase decisions
• Design around loyalty and reinforcement of purchase
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 43
Increasing Effectiveness ofDistribution Channel Marketing
LO7
Multichannel MarketingMultichannel Marketing
CRM DatabasesCRM Databases
RFID technologyRFID technology
Online
http://www.kidsdadsmoms.com
Chapter 19 Copyright ©2010 Cengage Learning Inc. All rights reserved 44
REVIEW LEARNING OUTCOMELO7
Leveraging Customer Information
Campaign management
Retaining loyal customers
Cross-selling other products
Designing targeted marketingcommunications
Reinforcing purchase decisions
Inducing product trial by new customers
Increasing effectiveness of distribution channel marketing
Improving customer service
Marketing Information
CRM Database
Applications