Transcript Chapter 19
Lamb, Hair, McDaniel MKTG2008-2009 19 CHAPTER Designed by Amy McGuire, B-books, Ltd. Chapter 19 Customer Relationship Management (CRM) Prepared by Deborah Baker, Texas Christian University Copyright ©2009 Cengage Learning Inc. All rights reserved 1 Learning Outcomes LO1 Define customer relationship management LO2 Explain how to establish customer relationships within the organization LO3 Understand interactions with the current customer base LO4 Outline the process of capturing customer data Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 2 Learning Outcomes LO5 Describe the use of technology to store and integrate customer data LO6 Describe how to identify the best customers LO7 Explain the process of leveraging customer information throughout the organization Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 3 LO1 What Is Customer Relationship Management? Define customer relationship management Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 4 Customer Relationship Management 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. LO1 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 5 Customer Relationship Management Strategy Organize the company around customer segments Encourage and track customer interaction with the company Foster customer-satisfying behaviors Link all processes of the company from its customers through its suppliers LO1 http://www.crmdownload.com Online Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 6 Customer Relationship Management Cycle Identify customer relationships Leverage customer information Understand interactions with current customer base Identify best customers Capture customer data based on interactions LO1 Chapter 19 Store and integrate customer data using IT Copyright ©2009 Cengage Learning Inc. All rights reserved 7 Implementing a CRM System Key Points: 1. Customers take center stage 2. Business must manage the customer relationship across all points of customer contact LO1 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 8 LO1 REVIEW LEARNING OUTCOME Customer Relationship Management Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 9 LO2 Identify Customer Relationships Explain how to establish customer relationships within the organization Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 10 Identify Customer Relationships Customer-Centric The company customizes its product and service offering based on data generated through interactions between the customer and the company. LO2 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 11 Identify Customer Relationships Learning An informal process of collecting customer data through customer comments and feedback on product or service performance. LO2 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 12 Beyond the Book LO2 Centered on Customers Chapter 19 Unilever and Stop & Shop teamed up to create a customer-centric promotion that was so successful, they won an award for their innovation and creativity. Stop & Shop’s goal – get customers to make more stock-up trips, the store’s most profitable type Unilever’s goal – get customers to buy more Unilever products per trip When asked, the customers said they’d stock up more if it were simpler to find things. So, the team built signs and made rip-off shopping lists, distributed store maps, and centrally stocked a breadth of customers’ favorite items. The result, the biggest sales spike in two years. And better yet, the team has been able to replicate the results in other stores. SOURCE: Julie Gallagher, “Stop & Shop and Unilever Share Customer-centric Plan,” Supermarket News, October 22, 2007. Copyright ©2009 Cengage Learning Inc. All rights reserved 13 Identify Customer Relationships Knowledge Management The process by which learned information from customers is centralized and shared in order to enhance the relationship between customers and the organization. LO2 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 14 Knowledge Management Experiential observations Comments Collected Information Includes: Customer actions Qualitative facts LO2 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 15 Empowerment Empowerment Delegation of authority to solve customers’ problems quickly— usually by the first person that the customer notifies regarding the problem. LO2 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 16 Beyond the Book LO2 Empowering Employees Chapter 19 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 Copyright ©2009 Cengage Learning Inc. All rights reserved 17 LO2 REVIEW LEARNING OUTCOME Identifying Customer Relationships Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 18 LO3 Interactions of the Current Customer Base Understand interactions with the current customer base Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 19 LO3 Interactions of the Current Customer Base Current Transaction Past Relationship Channel Customer Requested Service Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 20 LO3 Interactions of the Current Customer Base Touch Points All possible areas of a business where customers communicate with that business. Point-of-Sale Interactions Communications between customers and organizations that occur at the point of sale, normally in a store. http://www.bestbuy.com Online Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 21 LO3 REVIEW LEARNING OUTCOME Interactions with Current Customer Base Web Point of Sale Customer Kiosk Delivery, Installation Survey Product Registration Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 22 LO4 Capture Customer Data Outline the process of capturing customer data Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 23 Capture Customer Data Store visits Conversations with salespeople Interactions via the Web Traditional phone conversations Wireless communications LO4 http://www.geico.com Online Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 24 LO4 REVIEW LEARNING OUTCOME Capturing Customer Data Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 25 LO5 Store and Integrate Customer Data Describe the use of technology to store and integrate customer data Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 26 LO5 REVIEW LEARNING OUTCOME Store and Integrate Customer Data Response list Compiled list :::::::::::::::::::::::::::::::::::::::::: :::::::::::::::::::::::::::::::::::::::::: Database Chapter 19 \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ /////////////////////////////////////////////////////////// ~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~ Copyright ©2009 Cengage Learning Inc. All rights reserved Data Warehouse 27 LO6 Identifying the Best Customers Describe how to identify the best customers Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 28 Identifying the Best Customers Data Mining A data analysis procedure that identifies significant patterns of variables and characteristics that pertain to particular customers or customer groups. LO6 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 29 Data Mining Identify and profile the best customers Calculate their lifetime value Predict purchasing behavior LO6 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 30 Data Analysis Customer segmentation Recency-frequency-monetary analysis Lifetime value analysis Predictive modeling LO6 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 31 Recency-Frequency-Monetary Analysis 1. Identifies customers most likely to purchase again 2. Identifies and ranks “best customers” 3. Identifies most profitable customers LO6 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 32 Biz Flix LO6 Chapter 19 Casino Copyright ©2009 Cengage Learning Inc. All rights reserved 33 Data Manipulation Techniques Lifetime Value Analysis A data manipulation technique that projects the future value of the customer over a period of years. Predictive Modeling A data manipulation technique in which marketers try to determine what the odds are that some other occurrence will take place in the future. LO6 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 34 REVIEW LO6 LEARNING OUTCOME Identify the Best Customers Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 35 LO7 Leverage Customer Information Explain the process of leveraging customer information throughout the organization Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 36 CRM Marketing Database Applications Campaign management Reinforcing customer purchase decisions Retain loyal customers Inducing product trial by new customers Cross-selling other products and services Increasing effectiveness of distribution channel marketing Designing targeted LO7 communications marketing Improving customer service Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 37 Campaign Management Campaign Management 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. LO7 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 38 Campaign Management Developing customized offerings for appropriate segment Pricing these offerings attractively LO7 Chapter 19 Communicating offerings in a way that enhances customer relationships Copyright ©2009 Cengage Learning Inc. All rights reserved 39 Retaining Loyal Customers Retaining an additional 5 percent of customers increases profits by as much as 25 percent Improving customer retention by 2 percent can decrease costs by as much as 10 percent Loyalty programs reward loyal customers for making multiple purchases Loyalty programs provide information about 7 customers and trends LO Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 40 Targeted Marketing Communications Infrequent Users • Offer direct incentives, such as a price discount Moderate Users • Offer more reinforcement of past purchase decisions Heavy Users • Design around loyalty and reinforcement of purchase LO7 Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 41 Increasing Effectiveness of Distribution Channel Marketing RFID technology Multichannel Marketing CRM Databases LO7 http://www.kidsdadsmoms.com Online Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 42 LO7 REVIEW LEARNING OUTCOME Leveraging Customer Information Marketing Information Campaign management Retaining loyal customers CRM Database Cross-selling other products Designing targeted marketing communications Applications Reinforcing purchase decisions Inducing product trial by new customers Increasing effectiveness of distribution channel marketing Improving customer service Chapter 19 Copyright ©2009 Cengage Learning Inc. All rights reserved 43