1. 19 MKTG CHAPTER Lamb, Hair, McDaniel 2008-2009
Chapter 19 Customer Relationship Management (CRM)
MKTG
Lamb, Hair, McDaniel 19
Customer Relationship Management (CRM)
CHAPTER
Designed by
Amy McGuire, B-books, Ltd.
Prepared by
Deborah Baker, Texas Christian University

2. Learning Outcomes LO1 LO2 LO3 LO4
Chapter 19 Customer Relationship Management (CRM)
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

3. Learning Outcomes LO5 LO6 LO7 Describe the use of technology to
Chapter 19 Customer Relationship Management (CRM)
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 organization
LO5
LO6
LO7

4. Customer Relationship Management
Chapter 19 Customer Relationship Management (CRM)
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

5. Customer Relationship Management Strategy
Chapter 19 Customer Relationship Management (CRM)
Customer Relationship Management Strategy
Link all processes of the company from its customers
through its suppliers
Foster customer-satisfying behaviors
Encourage and track customer interaction with the company
Organize the company around customer segments
Online
LO1

6. Customer Relationship Management Cycle
Chapter 19 Customer Relationship Management (CRM)
Customer Relationship Management Cycle
Identify customer relationships
Understand interactions with current customer base
Leverage customer information
Capture customer data based on interactions
Identify best customers
Store and integrate customer data using IT
LO1

7. Implementing a CRM System
Chapter 19 Customer Relationship Management (CRM)
Implementing a CRM System
Key Points:
Customers take center stage
Business must manage the customer relationship across all points of customer contact
LO1

8. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO1
Customer Relationship Management

9. Identify Customer Relationships
Chapter 19 Customer Relationship Management (CRM)
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

10. Identify Customer Relationships
Chapter 19 Customer Relationship Management (CRM)
Identify Customer Relationships
Learning
An informal process of collecting customer data through customer comments and feedback on product or service performance.
LO2

11. Identify Customer Relationships
Chapter 19 Customer Relationship Management (CRM)
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

12. Experiential observations Collected Information Includes:
Chapter 19 Customer Relationship Management (CRM)
Knowledge Management
Qualitative facts
Customer actions
Comments
Experiential observations
Collected Information Includes:
LO2

13. Empowerment LO2 Empowerment
Chapter 19 Customer Relationship Management (CRM)
Empowerment
Empowerment
Delegation of authority to solve customers’ problems quickly—usually by the first person that the customer notifies regarding the problem.
LO2

14. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO2
Identifying Customer Relationships

15. Interactions of the Current Customer Base
Chapter 19 Customer Relationship Management (CRM)
LO3
Requested
Service
Channel
Past
Relationship
Current
Transaction
Customer

16. Interactions of the Current Customer Base
Chapter 19 Customer Relationship Management (CRM)
LO3
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.
Online

17. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO3
Interactions with Current Customer Base
Web
Point of Sale
Kiosk
Delivery, Installation
Survey
Product Registration
Customer

18. Capture Customer Data LO4 Store visits Conversations with salespeople
Chapter 19 Customer Relationship Management (CRM)
Capture Customer Data
Store visits
Conversations with salespeople
Interactions via the Web
Traditional phone conversations
Wireless communications
LO4
Online

19. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO4
Capturing Customer Data

20. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO5
Store and Integrate Customer Data
Database
Compiled list
Response list
Data Warehouse
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21. Identifying the Best Customers
Chapter 19 Customer Relationship Management (CRM)
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

22. Data Mining LO6 Identify and profile the best customers
Chapter 19 Customer Relationship Management (CRM)
Data Mining
Identify and profile the best customers
Calculate their lifetime value
Predict purchasing behavior
LO6

23. Data Analysis LO6 Customer segmentation
Chapter 19 Customer Relationship Management (CRM)
Data Analysis
Predictive modeling
Lifetime value analysis
Recency-frequency-monetary analysis
Customer segmentation
LO6

24. Recency-Frequency-Monetary Analysis
Chapter 19 Customer Relationship Management (CRM)
Recency-Frequency-Monetary Analysis
Identifies customers most likely to purchase again
Identifies and ranks “best customers”
Identifies most profitable customers
LO6

25. Data Manipulation Techniques
Chapter 19 Customer Relationship Management (CRM)
Data Manipulation Techniques
Lifetime Value Analysis
Predictive Modeling
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.
LO6

26. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO6
Identify
the Best Customers

27. Database Applications
CRM Marketing
Database Applications
Chapter 19 Customer Relationship Management (CRM)
Campaign management
Retain loyal customers
Cross-selling other products and services
Designing targeted marketing communications
Reinforcing customer purchase decisions
Inducing product trial by new customers
Increasing effectiveness of distribution channel marketing
Improving customer service
LO7

28. Campaign Management LO7 Campaign Management
Chapter 19 Customer Relationship Management (CRM)
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

29. Campaign Management LO7
Chapter 19 Customer Relationship Management (CRM)
Communicating offerings in a way that enhances customer relationships
Developing customized offerings for appropriate segment
Pricing these offerings attractively
LO7

30. Retaining Loyal Customers
Chapter 19 Customer Relationship Management (CRM)
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
customers and trends
LO7

31. Targeted Marketing Communications LO7
Chapter 19 Customer Relationship Management (CRM)
Infrequent Users
Moderate Users
Heavy Users
Offer direct incentives, such as a price discount
Offer more reinforcement of past purchase decisions
Design around loyalty and reinforcement of purchase
LO7

32. Multichannel Marketing
Increasing Effectiveness of Distribution Channel Marketing
Chapter 19 Customer Relationship Management (CRM)
Multichannel Marketing
CRM Databases
RFID technology
Online
LO7

33. REVIEW LEARNING OUTCOME
Chapter 19 Customer Relationship Management (CRM)
REVIEW LEARNING OUTCOME
LO7
Leveraging Customer Information
Marketing Information
Campaign management
Retaining loyal customers
Cross-selling other products
Designing targeted marketing communications
Reinforcing purchase decisions
Inducing product trial by new customers
Increasing effectiveness of distribution channel marketing
Improving customer service
CRM Database
Applications