Transcript Customer relationship management (CRM)

THARAKA DIAS
MBA(USA), BBA(USA), Dip in Mgt, ACIM(UK),
FAEA(Dip in AEA-UK), FinstSMM(UK), CPM(Asia),
MSLIM
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How can companies deliver customer value,
satisfaction, and loyalty?
 What is the lifetime value of a customer,
and why is it important to marketers?
 How can companies cultivate strong
customer relationships?
 What is the role of database marketing in
customer relationship management?
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Customer perceived value (CPV)—the
difference between the prospective
customer’s evaluation of all the
benefits and all the costs of an
offering and the perceived
alternatives.
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Total customer value
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Total customer cost
 Product value
 Monetary cost
 Services value
 Time cost
 Personnel value
 Energy cost
 Image value
 Psychic cost
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A deeply held commitment to re-buy
or re-patronize a preferred product or
service in the future despite
situational influences and marketing
efforts having the potential to cause
switching behavior.
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A person’s feelings of pleasure or
disappointment that result from
comparing a product’s perceived
performance (or outcome) to
expectations.
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Quality (or grade) is the totality of
features and characteristics of a
product or service that bear on its
ability to satisfy stated or implied
needs.
Forms
 Conformance quality
 Performance quality
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Correctly identifying customers’ needs and
requirements
Communicate customer expectations properly
to product designers
Be sure orders are filled correctly and on time
Provide customers with proper instructions,
training, and technical assistance
Stay in touch with customers after the sale
Gather customer ideas for improvements and
convey them to the appropriate departments
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A profitable customer is one that over
time yields a revenue stream that
exceeds by an acceptable amount the
company’s cost stream for attracting,
selling, and servicing that customer.
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Best conducted with an accounting
technique called Activity-Based
Costing (ABC).
Estimate all revenue coming from the
customer, less all costs that go into
serving that customer.
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Describes the net present value of the
stream of future profits expected over
the customer’s lifetime purchases.
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Customer relationship management
(CRM) is the process of carefully
managing detailed information about
individual customers and all customer
“touch points” to maximize customer
loyalty.
 Touch point—any occasion on which a
customer encounters the brand and
product.
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1. Identify your prospects and
customers
2. Differentiate customers in terms of
their needs and their value to your
company
3. Interact with individual customers
4. Customize products, services, and
messages to each customer
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PARETO’S LAW
80:20 RULE
20% of customer account for 80% of
turn over
20% of customer account for 80% of
profit
20% of customer account for 80% of all
your problems
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Customer
service
Sales
analysis
Customer
segmentati
on
Product
quality
Acquisitio
n
Retention
Trust and
privacy
advertising
merchandising
Campaign
management
Customer
satisfaction
Channel
support
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Potentials
Prospects
First-time customers
Repeat customers
Clients
Members
Advocates
Partners
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Interact with customers
Develop loyalty programs
 Frequency programs
 Club membership programs
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Personalize marketing
Create institutional ties
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Loyalty is about the conscious decision of your customers to
commit their continual repurchases to your brand. It is :
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 Driving an extra few miles to do your shopping
Recommending it to your best friend
An emotional and rational ‘lock-in’
Sometimes encouraged by an incentive or reward
A better path to profit
Loyalty is essentially a one-way commitment for which the
customer receives a reward, but it is also about relationships
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Two-way
interaction in which both sides create and
exchange mutual benefits
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Satisfaction is important business success
However, satisfaction itself is not the only thing
that delivers increased profits and a greater share
of customer’s wallets
Satisfaction is only a feeling that is most likely to
disappear quickly
Satisfaction alone isn’t adequate customer loyalty
must combine with satisfaction for it to be
effective
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Identify the best prospects
Match a specific offer with a specific
customer as a way to sell, cross-sell,
and up-sell
Deepen customer loyalty by
remembering preferences and
offering relevant incentives and
information
Reactivate customer purchasing
Avoid serious mistakes
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Large investment
Difficulty in getting everyone to be
customer oriented
Not all customers want an ongoing
relationship
Assumptions behind CRM may not
always hold true
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High
satisfaction
low
satisfaction
Highly competitive
Low differentiation
Delighted
customers
probable good
loyalty program
Low customer
value
High barriers to
change due to
excellent loyalty
program
Alternative
available
Low loyalty
Vulnerable to
change
High loyalty
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Customer database—an organized
collection of comprehensive information
about individual customers or prospects
that is current, accessible, and actionable
for marketing purposes.
 Database marketing—the process of
building, maintaining, and using customer
databases and other databases to make
contact, facilitate transactions, and build
customer relationships.
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Data warehouse—organized data
where marketers can capture, query,
and analyze it to draw inferences
about an individual customer’s needs
and responses.
Datamining—statisticians extract
useful information about individuals,
trends, and segments from the mass
of data.
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Thank
you
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