1.Understand the essential elements that comprise a customer relationship management program 2.Describe the relationship that exists between marketing research and customer relationship 3.Illustrate the process of data collection for a customer relationship management program Chpt 4-5 Learning Objectives Chpt 4-5 Learning Objectives

Customer Relationship Management (CRM) –Business strategy To understand, anticipate and manage the needs of an organization’s current and potential customers –CRM A combination of strategic, process, organizational, and technological change Value of Customer Relationship Management

Customer Relationship Management (CRM) –Integration of customer information throughout the business –Business enterprise Must respond to rapidly changing environments Disrupters –Internet –Electronic commerce –New types of businesses The Essentials of CRM

–Retaining your current customers cheaper than getting new ones –ratio 1 to 5 for sales and marketing expenditures –Customer Interaction Organizations Centerpiece of CRM Program Customer Knowledge The Essentials of CRM

1.Types of relationships with customers 2.Types of interaction required to acquire and capture customer information 3.How to store and integrate the customer data 4.How and when to analyze the information for the best customer segments based on profitability 5.How this information is to be disseminated throughout the enterprise The Essentials of CRM

Primary Functions of CRM –To Collect –To Store –To Analyze Customer Interaction Information Customer knowledge Marketing Research and Customer Relationship Management

–MR Captures and Integrates Information Demographic, psychographic, behavioral and preference data –Data Used for Two Purposes To create customer profiles To segment customers –Create a Market Intelligence Culture Marketing Research and Customer Relationship Management

Strategic Use of Customer Information Two Key Questions 1.What does my customer value? 2.What is the value of my customer? Primary Information Collected MR–Analyzes customer values, likes and dislikes, lifetime value, and profitability Transforming Marketing Research into Market Intelligence

–Information Based on Transactional Focus Exchanges with customers—Window of Opportunity Build loyalty –Enterprise Wide Approach to the Use of Information Information at every touchpoint –Technology Support of the CRM Structure Link-pin—turning customer data into customer knowledge Transforming Marketing Research into Market Intelligence Understand the meaning of marketing intelligence

What is a Database Collection of information indicating what customers are purchasing, how often they purchase, and the amount they purchase –Database Generated By Sales invoices Warranty cards Telephone calls Market research projects MR and CM: The Database Process

Purpose of a Customer Database To develop meaningful, personal communication with its customers Specific Purpose of Databases –To improve efficiency of market segmentation –To increase repeat purchases –To enhance sales and media effectiveness –To enable users to measure, track and analyze customer behaviors Data Collection in a CRM Environment

–Benefits of Databases Exchanging information with customers Determining heavy users Determining lifetime customer value Building segment profiles Data Collection in a CRM Environment

Marketing databases answer crucial questions –Why do some consumers buy our products or services regularly, while others do not? –How do our products compare with the competition? –What is the relationship between perceived value and price of the product? –How satisfied are customers with the service level and support for the product? –What are the comparisons among lifestyles, demographics, attitudes, and media habits? Data Collection in a CRM Environment

Marketing Research Question –Description –Prediction Data Mining Approaches –Profile groups –Predict customer satisfaction levels Database Technology and Data Warehousing