1. Strategic Marketing 1. Imperatives for Market-Driven Strategy
2. Markets and Competitive Space
3. Strategic Market Segmentation
4. Strategic Customer Relationship Management
5. Capabilities for Learning about Customers and Markets
6. Market Targeting and Strategic Positioning
7. Strategic Relationships
8. Innovation and New Product Strategy
9. Strategic Brand Management
10. Value Chain Strategy
11. Pricing Strategy
12. Promotion, Advertising and Sales Promotion Strategies
13. Sales Force, Internet, and Direct Marketing Strategies
14. Designing Market-Driven Organizations
15. Marketing Strategy Implementation And Control

2. STRATEGIC CUSTOMER RELATIONSHIP MANAGEMENT
CHAPTER 4
STRATEGIC CUSTOMER RELATIONSHIP MANAGEMENT
McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

3. PIVOTAL ROLE OF CUSTOMER RELATIONSHIP MANAGEMENT
DEVELOPING A CRM STRATEGY
CRM Levels
CRM Strategy Development
CRM Implementation
VALUE CREATION PROCESS
Customer Value
Value Received by the Organization
CRM and Value Chain Strategy
CRM AND STRATEGIC MARKETING
Implementation
Performance Metrics
Short-Term Versus Long-Term Value
Competitive Differentiation

4. CUSTOMER RELATIONSHIP MANAGEMENT
CRM is a cross-functional core business process concerned with achieving improved shareholder value through the development of effective relationships with key customers and customer segments.
CRM Recognizes That
Customers:
Vary in their economic value
to the company
Differ in their expectations
toward the firm

5. CUSTOMER LIFETIME VALUE
4-3
CUSTOMER LIFETIME VALUE
Customer lifetime value (CLV) calculates past profit produced by the customer for the firm – the sum of all the margins of all the products purchased over time, less the cost of reaching that customer
To this is added a forecast of margins on
future purchases (under different assumptions
for different customers), discounted back to
their present value.
This process provides an estimate of the
profitability of a customer during the time
span of the relationship.
The CLV calculation is a powerful tool for
focusing marketing and promotional efforts
where they will be most productive.

6. PERSPECTIVES TOWARD CRM
4-4
PERSPECTIVES TOWARD CRM
STRATEGIC-
THE ENTIRE COMPANY
REQUIRED MARKETING FUNCTIONS
THE CUSTOMER

7. THE STEPS IN DEVELOPING A CRM STRATEGY
4-5
THE STEPS IN DEVELOPING A CRM STRATEGY
Gain enterprise commitment
Build a CRM project team
Business needs analysis
Define the CRM strategy
Source: V. Kumar and Werner J. Reinartz, Customer Relationship Management (Hoboken, NJ: John Wiley & Sons, Inc.), 2006, 39.

8. DEFINE THE CRM STRATEGY
4-6
DEFINE THE CRM STRATEGY
Value Proposition 1 5
Other Stakeholders 2
Business
Case
CRM STRATEGY 4 3
Enterprise Transformation Plan
Customer Strategy
Source: V. Kumar and Werner J. Reinartz, Customer Relationship Management (Hoboken, NJ: John Wiley & sons, Inc.), 2006, 42.

9. IMPLEMENTATION DANGERS
4-7
IMPLEMENTATION DANGERS
Implementing Without Developing a Customer Strategy
Failing to Initiate Necessary Organizational Change
Allowing Technology to Dominate the CRM Process
Focusing on the Wrong Customers

10. VALUE CREATION PROCESS
4-8
VALUE CREATION PROCESS
Value Received by the Customer
Value Received by the Organization
THE VALUE EXCHANGE
Successful Value Exchange

11. 4-9
METRICS FEATURE
How General Electric Co. Measures Customers’ Experience
Happy (And Not-So-Happy) Customers
General Electric is a big user of the “Net Promoter” concept of customer satisfaction, popularized by Fred Reichheld of Bain & Co. Below, questions similar to those on which GE’s Capital Solutions unit asks customers to rate the unit’s performance on a 0 – 10 scale.
How willing are you to recommend us to a friend or
associate?
How would you rate our ability to meet your needs?
How would you rate our people?
How would you rate our processes?
What is your impression of our market reputation?
How would you rate the cost of doing business with us?
How would you rate the overall value of our product or
service as being worth what you paid?
Source: Kathryn Kranhold, “Client-Satisfaction Tool Takes Root,” The Wall Street Journal, July 10, 2006, B3.

12. CRM AND VALUE CHAIN STRATEGY
4-10
CRM AND VALUE CHAIN STRATEGY
The Perfect Customer Experience
“The perfect customer experience, which must be affordable for the company in the context of the segments in which it operates and its competition, is a relatively new concept. This concept is now being embraced in industry by companies such as TNT, Toyota’s Lexus, Oce, and Guinness Breweries, but it has yet to receive much attention in the academic literature. Therefore, multi-channel integration is a critical process in CRM because it represents the point of co-creation of customer value. However, a company’s ability to execute multi-channel integration successfully is heavily dependent on the organization’s ability to gather and deploy customer information, from all channels and to integrate it with other relevant information.”
Adrian Payne and Pennie Frow, “A Strategic Framework for Customer Relationship Management,” Journal of Marketing (October 2005), 173.

13. CRM AND STRATEGIC MARKETING
4-11
CRM AND STRATEGIC MARKETING
STRATEGIC MARKETING
CRM
From the perspective of strategic marketing, there are several reasons why CRM is important and why there should be extensive marketing involvement in decisions about CRM. Importantly, an organizational perspective is needed in guiding the CRM strategy.