Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-1 Chapter Eighteen Customer Relationship Management and Marketing Research

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-2 Learning Objectives  Understand the essential elements that comprise a customer relationship management (CRM) program.  Describe the relationship that exists between marketing research and customer relationship management.  Understand the meaning of customer relationship management.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-3 Learning Objectives  Describe how organisations use customer information in a customer relationship management environment.  Understand the role of technology in a customer relationship management program.  Illustrate the process of data collection for a customer relationship management program.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-4 Introduction  Customer relationship management (CRM) and marketing research are linked in the relationship management process.  CRM is the management of customer relationships based on the integration of customer information throughout the business in order to achieve maximum cash flow.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-5 Customer Interaction and Customer Knowledge  Customer interaction refers to the relationship between the business enterprise and the customer.  Customer knowledge refers to the information which can be framed into ‘profiles’—which can be utilised to segment customers, tailor interactions and build robust customer relationships.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-6 CRM The management of customer relationships based on the integration of customer information throughout the business in order to achieve maximum cash flow.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-7 CRM and Virgin Mobile  Virgin used CRM to deliver personalised customer service.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-8 Reasons for CRM ‘As few as 10% of your customers contribute 90% to the company’s profits. The only problem is finding out who they are!’ David Ogilvy

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex 18-9 Reasons for CRM Efforts to encourage customer complaints and manage customer dissatisfaction

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex Essentials of CRM  Relies on customer interaction.  Used to create customer profiles, segment the market, and build stronger relationships.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex The Customer Relationship Management Process Flow model of the customer relationship management process

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex The Role of Marketing Research in CRM  What is the value of the customer segment?  What kind of relationship will add value to the firm’s customers (loyalty programs, preferred customer status, etc.)?  What relationship content will add value to the customer segment?  What are customers’ responses to promotions?

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex The Defining Qualities of CRM  Need to transform a company into an information-utilisation company that integrates customer interaction information for the purpose of:  being strategically connected  responsive and  proactive to its customers.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex Strategic Use of Customer Information  Two key questions drive a CRM program; namely:  What does my customer value?  What is the value of my customer?

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex Information Based on a Transactional Focus  CRM moves out beyond the here and now of real-time transactions with customers.  CRM attempts to determine what a customer really desires, not just what they happen to buy when a desired item is not available.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex Enterprise-Wide Approach to the Use of Information CRM views information as something to be disseminated across every internal department within the business enterprise and with other facets of the supply chain.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex Technology Support of the CRM Structure  Technology provides the platform for turning customer data into customer information.  CRM and technology work together:  to more precisely target market segments;  to integrate and store information in a centralised database called a data warehouse.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex  CRM and technology work together:  to mine data for maximum profitability;  to determine the economics of customer acquisition, retention and lifetime value.

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex CRM Management Applications Customer relationship managment applications

Copyright  2007 McGraw-Hill Pty Ltd PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau Slides prepared by Judy Rex Data Collection in a CRM Environment  Passive Data  Active Data  Directed Data