Chapter 18: Customer Relationship Management

Question 1

What is CRM?

Answer 1

is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on precisely defined customer groups.

Question 2

how do you accomplish customer relationship management (CRM)

Answer 2

○ Organizing company around customer segments
○ Establish and tracking customer interactions with the firm
○ Fostering customer-satisfying behaviors
=Linking all the firms processes from its customers through to its suppliers.

Question 3

How can you identify customer relationships?

Answer 3

learning
knowledge management
empowerment
interactions

Question 4

How can you identify customer relationships?:learning

Answer 4

collecting customer information through comments and feedback on product and services

Question 5

How can you identify customer relationships?:knowledge management

Answer 5

process by which customer information is centralized and share in order to enhance the relationship between customers and the organization.

Question 6

How can you identify customer relationships?:empowerment

Answer 6

organizations give representatives authority to negotiation mutually satisfying commitments with customers

Question 7

How can you identify customer relationships?:interactions

Answer 7

• touch point at which a customer and a company representative exchange information and develop learning relationships.

Question 8

Understanding customer interactions.: Web-based-

Answer 8

data is computes, compiled, and used to segment customers, refine market efforts, develop new products an deliver a degree of individual customization to improve customer relationships

Question 9

Understanding customer interactions.:point of sale

Answer 9

software programs enable customers to easily provide information abut themselves without feeling their privacy is violated. Also used to increase customer satisfaction through the development of in-store services and customer recognition promotions

Question 10

How do you capture customer data?

Answer 10

• Store visits
	• Conversations with salespeople 
	• Interactions vis the web
	• Tradition phone conversations
          =Wireless communication

Question 11

What technology is used to store and integrate customer data?

Answer 11

data warehouse
database
response list
compiled lists

Question 12

Data warehouse

Answer 12

is a central repository (database) of customer data collect by an organization. It is a large computerized file of all information collected in the previous phase of CRM process

Question 13

database

Answer 13

a collection of data, especially one that can accessed and manipulated by software.

Question 14

response list

Answer 14

based on customers who have indicated an interest in a products.

Question 15

compiled lists

Answer 15

are created by an outside company that has collected names and contact information for potential consumers. Information is usually obtained from telephone directories and membership rosters of various groups.

Question 16

How do you identify the best customers?

Answer 16

-Data mining
- the 80/20 rule
-customer segmentation
-RFM– Recently-frequency-monetary goals
-LTV- Lifetime Value Analysis
Predictive modelling

Question 17

-Data mining

Answer 17

a data analysis procedure that identifies significant patterns of variables and characteristics that pertain to particular customers or customer groups

Question 18

-LTV- Lifetime Value Analysis

Answer 18

projects the future value of the customer over a period of years. –> marketing to repeat customers is more profitable than marketing to first time buyers

Question 19

predictive modelling-

Answer 19

• marketers try to determine, based on some past set of occurrences, what the odds are that some other occurrence, such as an internet inquire or purchase, will take place in the future.

Question 20

RFM- recently-frequency-monetary analysis.

Answer 20

identifies those customers mostly to purchase again because they have bought recent, bought most frequently, or have spend a specified amount of money with the company.

Question 21

what do you use info gathered form technology and best customers for?

Answer 21

• campaign management
• retain customers
• cross-sell
• targeted communications
• reinforce purchase
• induce trial
• increase distribution effectiveness
• improve customer service

Question 22

-campaign management

Answer 22

Involves monitoring and leveraging customer interactions to sell a company’s products and to increase customer service

Question 23

-retain customers

Answer 23

Make every effort to maintain and increase their loyalty (loyalty programs)v

Question 24

-cross-sell

Answer 24

use of database to sell other products to customers that match their demographic, lifestyle, or behavioural characteristics

Question 25

• targeted communications

Answer 25

Database enables markets to track customers’ relationships to the company’s products and services and modify the marketing message according

Question 26

• reinforce purchase

Answer 26

To get rid of cognitive dissonance , reinforce the positive aspect of their purchase .

Question 27

• induce trial

Answer 27

Using the results of the “perfect customer” to profile potential customers

Question 28

-improve customer service

Answer 28

Customer retention- percentage of customers that repeatedly purchase products from a company