Unit 30 - Chapter 3 - CRM

7/30/2019 Unit 30 - Chapter 3 - CRM

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Unit 30:Chapter 3

Customer RelationshipManagement


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OverviewBuilding Customer Relationships, 1:1Relationship Marketing Defined

Stakeholders

Customer Relationship Management (CRM)CRM BenefitsCRMs Facets

CRM Building Blocks1. CRM Vision2. CRM Strategy3. Valued Customer Experience4. Organizational Collaboration5. CRM Processes6. CRM Information7. CRM Technology

CRM Metrics


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Building Customer Relationships, 1:1 Cisco: Develops long-term customers relationships one at a time (1:1) &

handle millions of these close relationships thanks to information.

A customer with an investment in software and high satisfaction isbrand loyal: Will not easily be enticed by competition.

Will slowly spend an increasing amount of money on additionalproducts/services and also refer others.

Relationship capital:A firms ability to build and maintainrelationships with customers, suppliers, and partners may be moreimportant than a firms land, property, and financial assets.


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Stakeholders



CRM Metrics


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Relationship Marketing Defined Relationship marketing(= 1:1 marketing): is about establishing,

maintaining, enhancing, and commercializing customer relationshipsthrough promise fulfillment.

Firms try to build profitable, mutually beneficial relationships in the longterm,

The balanced scorecard customer focus was created from this idea.

Promise fulfillment = when firms make offers in their marketing

communications programs, customer expectations will be metthrough actual brand experiences.

Good relationships are built when company personnel meet the

promises made by salespeople and promotional messages.


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Relationship Marketing DefinedRelationship marketing: Involves two-way communication with individual stakeholders, one at a

time (1:1), Firm focuses on share of mind = share of customer = share of wallet,

rather than share of market,

Procter and Gamble: Must differentiate its brands of laundry detergent for sale to the masses, It tries to build relationships with mothers who will buy increasing numbers

of P & G products over the years, From Ivory powder for washing baby clothes and Pampers diapers to Crest

toothpaste for the family and Olay cosmetics for themselves.


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Stakeholders



CRM Metrics


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Stakeholders3. Lateral partners.

Other businesses that join with the firm for some common goalbut not for transactions with each other (not-for-profitorganizations, or governments).

4. Consumers.

The individuals who are end users of products and services.

Marketers must differentiate between business customers and

final consumers because different tactics are often employed inthe B2C and B2B markets.


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Stakeholders


CRM Building Blocks1. CRM Vision2. CRM Strategy

3. Valued Customer Experience4. Organizational Collaboration5. CRM Processes6. CRM Information7. CRM Technology

CRM Metrics


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Customer Relationship Management (CRM)CRM:

Is used to define the process of creating and maintaining relationshipswith business customers or consumers.

Is a holistic process of acquiring, retaining, and growing customers.

Includes all online and offline relationship management.

Firms are recognizing that if they dont keep their customers happy,someone else will.


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Stakeholders




CRM Metrics


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CRM Benefits Key CRM benefit = its cost-effectiveness.

Consider the following:

U.S. businesses saved $155 billion between 1998 and 2000 by usingInternet technology for both CRM and Supply Chain Management.

A 5% increase in customer retention translates to 25% to 125%profitability in the B2B market.

Customer defection rates are near 20% per year.

The cost of acquiring a new customer is typically five times higherthan the cost of retaining a current one.


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CRM Benefits

Retention is less costly than acquisition because:

Reduced promotion costs for advertising and discounts,

Higher response rates to promotional efforts yield more profits, Sales teams can be more effective when they get to know individual

customers.

Loyal customers are experienced customers

= They know the products well,= They know who to call in the firm when they have questions.

Loyal customers cost less to service.


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1. CRM VisionGuarding Customer Privacy Intrusions into peoples lives: Junk mail, spam, repeated telephone calls

= examples of marketing messages that can upset consumers.

Whats a marketer to do? Build relationships through dialogue and through better target profiling. Firms must listen to customers and prospects and give them what they

want.

Why? Retention & development of customer relationships are more profitable than

one-time customer transactions. Marketers can use consumer information to build more precise target

profiles. Individuals do not get upset with firms who send valuable andtimely information to them.


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1. CRM VisionTRUSTe

To help Web sites earn the trust of their users, an independent,nonprofit privacy initiative named TRUSTe provides its seal and logo to

any Web site meeting its philosophies: Adopting and implementing a privacy policy that factors in the

goals of your individual Web site & consumer anxiety over sharingpersonal information online.

Posting notice and disclosure of collection and use practicesregarding personally identifiable information via a posted privacy

statement. Giving users choice and consent over how their personal

information is used and shared.

Putting data security and quality, and access measures in placeto safeguard, update, and correct personally identifiable information.


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TRUSTe Builds User TrustSource:

www.truste.org
http://www.truste.org/http://www.truste.org/http://www.truste.org/http://www.truste.org/http://www.truste.org/http://www.truste.org/


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1. CRM VisionTRUSTe

In addition, sites must publish the following information on their sites togain the TRUSTe seal:

What personal information is being gathered by your site. Who is collecting the information.

How the information will be used.

With whom the information will be shared.

The choices available to users regarding collection, use, and

distribution of their information. The security procedures in place to protect users collected

information from loss, misuse, or alteration.

How users can update or correct inaccuracies in their pertinentinformation.


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StakeholdersCustomer Relationship Management (CRM)

CRM BenefitsCRMs Facets



CRM Metrics


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7. CRM TechnologyCompany-Side Tools There are important e-marketing tools used by firms to push

customized information to users. Users are unaware that marketers are collecting data + using these

technologies to customize offerings.

Cookies Cookie files are the reason that customers returning to Amazon.com get

a greeting by name + users dont have to remember passwords toevery site for which they are registered.

Cookie files allow ad-server firms to see the path users take from site tosite and, serve advertising banners relevant to user interests.

Cookies keep track of shopping baskets and other tasks so that userscan quit in the middle and return to the task later.


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Company-Side Tools

(push) Description

Cookies Cookies are small files written to the users hard drive after visiting a

Web site. When the user returns to the site, the companys server looks

for the cookie file and uses it to personalize the site.

Web log analysis Every time a user accesses a Web site, the visit is recorded in the Web

servers log file. This file keeps track of which pages the user visits, how

long he stays, and whether he purchases or not.

Data mining Data mining involves the extraction of hidden predictive information in

large databases through statistical analysis.

Real-time profiling Real-time profiling occurs when special software tracks a usersmovements through a Web site, then compiles and reports on the data at

a moments notice.

Collaborative filtering Collaborative filtering software gathers opinions of like-minded users

and returns those opinions to the individual in real-time.

Outgoing e-mail Distributed E-

Mail

Marketers use e-mail databases to build relationships by keeping in

touch with useful and timely information. E-mail can be sent toindividuals or sent en masse using a distributed e-mail list.

Chats

Bulletin Boards

A firm may listen to users and build community by providing a space for

user conversation on the Web site

iPOS terminals Interactive Point of Sale terminals are located on a retailers counter,

and used to capture data and present targeted communication.

Selected E-Marketing Push Customization Tools


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7. CRM TechnologyWeb Site Log By performing Web log analysis, firms can do many things,

(customize Web pages based on visitor behavior).

Softwares can also tell which sites the users visited immediately beforearriving + what key words they typed in at search engines to find thesite + user domains, and much more.

Data Mining Marketers dont need a priorihypotheses to find value in databases, but

use software to find patterns of interest.


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7. CRM TechnologyReal-Time Profiling Customer profiling uses data warehouse information to help marketers

understand the characteristics and behavior of specific target groups.

American Express has done this for years: It sends bill inserts to groupsof customers based on their previous purchasing behavior.

Whats new? This can all be done online inexpensively via e-mail and customized

Web pages = Real-time profiling= tracking user clickstream in realtime,

Allows marketers to profile + make instantaneous and automaticadjustments to site promotional offers and Web pages.

For example, the software could be set to use the following rule: If acustomer orders a Dave Matthews Band CD, display a Web pageoffering a concert T-shirt.


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MyPoints Rewards Members for Time Spent Online

Source: www.mypoints.com
http://www.mypoints.com/http://www.mypoints.com/http://www.mypoints.com/http://www.mypoints.com/http://www.mypoints.com/http://www.mypoints.com/


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7. CRM TechnologyOutgoing E-Mail

E-mail is used to communicate with individuals or lists of individuals(distributed e-mail) to increase their purchases, satisfaction, and loyalty.

Many companies maintain e-mail distribution lists for customers andother stakeholders.

Permission marketing dictates that customers will be pleased to receivee-mail for which they have opted-in.

MyPoints rewards consumers with points and gift certificates, all forreading targeted e-mail ads and shopping at selected sites.

MyPoints client companies pay a fee for these e-mails, some of whichgo directly to customers as points.

MyPoints advertises responsible e-mail messaging = consumers agree

to receive commercial messages within their e-mails.


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7. CRM TechnologyOutgoing E-Mail

Spam does not build relationships but instead focuses on customeracquisition.

The Internet provides the technology for marketers to send 500,000 ormore e-mails at the click of a mouse for less than the cost of 1 postagestamp.

Relationship-building e-mail requires: Sending e-mails that are valuable to users, Sending them as often as users require, Offering users the chance to be taken off the list at any time.

It means talking and listening to consumers as if they were friends.


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Chat Opportunities with the U.S. Government and Its CitizensSource

: www.commerce.gov
http://www.expedia.msn.com/http://www.expedia.msn.com/http://www.expedia.msn.com/http://www.expedia.msn.com/http://www.expedia.msn.com/http://www.expedia.msn.com/


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7. CRM TechnologyChat and Bulletin Boards Firms build community + learn about customers and products through

real-time chat and bulletin board/newsgroup e-mail postings at its Website.

Analysis of these exchanges is used in the aggregate to designmarketing mixes that meet user needs. Expedia send e-mail notes to users who participate in the chats with

offers of special tours.

iPOS Terminals Small customer facing machines near the brick-and-mortar cash

register, used to record a buyers signature for a credit card transaction. They can gather survey and other data + present individually targeted

advertising and promotions as well.


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7. CRM TechnologyClient-Side Tools Based on a users action at her computer or handheld device. The customer pull that initiates the customized response.

Agents= Shopping agents and search engines match user input to databasesand return customized information.

Agent software often relies on more than one interaction. A user might type in computer on the Dell site and then be presented

with either laptop or desktop options to narrow the search.


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7. CRM TechnologyWireless Data Services They are included as a separate tool because of their rapid growth and

distinctive features.

Wireless users only want text data due to the screen size of wirelessdevices and download time for graphics.

Services such asAvantGo.com offer users news headlines, sportsscores, stock quotes, weather in selected cities, and more to users onpagers.

As users customize this information, they give serving firms a betteridea of how to better serve them and, build relationship.
http://www.avantgo.com/http://www.avantgo.com/


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7. CRM TechnologyWeb Forms Many corporate Web sites use Web forms for a multitude of purposes

from site registration and survey research to product purchase. Many sites strive to build the number of registered users as a prelude to

transactions.

FAX-on-Demand In the B2B market, firms often want information sent via FAX machine. Services such as eFax.com allow Internet users to send and receive FAX

transmissions at their Web sites.

Why would a user use this service as opposed to an e-mail attachment? When the document is not in digital form, a signature is needed, or

Internet access is not available so the document cannot be sent as ane-mail attachment.


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7. CRM TechnologyIncoming E-Mail

Post-transaction customer service is an important part of the customercare life cycle.

The Web online channel = a feedback button or form that delivers an e-mail message to the corporation.

Often an automated customer service program acknowledges themessage via e-mail and indicates that a representative will beresponding shortly.

Research shows that firms are getting much better at responding toincoming e-mail.

Companies should include feedback options online only if they havestaff in place to respond: E-mail addresses on a Web site imply apromise to reply.


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Documents

Unit 30 - Chapter 3 - CRM