CHP 5: CRM, BIG DATA, & MARKETING ANALYTICS Flashcards
What is customer relationship management?
- Customer Relationship Management (CRM) - comprehensive business model for increasing revenues & profits by focusing on customers
- must involve numerous stakeholder access
- marketing managers are the core contributor
3 major objectives of CRM
○ Customer acquisition - acquisition of the right customer based on known/learned characteristics that will drive growth & increase margins
○ Customer retention - retention of satisfied & loyal profitable customers & channels
○ Customer Profitability - increased individual customer margins, while offering the right products at the right time
What is customer loyalty based on?
○ Based on high satisfaction coupled with a high level of perceived value derived from the offering and a strong relationship with the provider and its brand(s)
What key parts of a marketing plan rely on CRM-generated information?
situation analysis
market research
strategy development implementation
measurement phases of marketing planning
Customer value co-creation
customers and providers combine forces to co-create offerings of value
Customer experience management
organization-wide strategic focus on ensuring that all aspects of a customer’s encounters with the firm meet or exceed their expectations
○ consistently great customer experiences lead to higher levels of satisfaction and loyalty to the provider and its offerings
Customer empowerment
reflects the extent to which a firm consistently provides its customers various avenues to (a) connect with the firm and actively shape the nature of their encounters and (b) connect and collaborate with each other
- important in younger groups: grown up with social media and related technology-based platforms to easily share information, praise, criticism, suggestions, and ideas about providers products services, and general business practices and policies
What is the customer lifetime value (CLV)?
investment in CRM yields more successful long-term relationships with customers, and that these relationships pay handsomely in terms of cost savings, revenue growth, profits, referrals, and other important business success factors
what is return on customer investment?
calculate an estimate of the projected financial returns from a customer over the long run
○ useful strategic tool for deciding which customers deserve what levels of investment of various resources (money, people, time, information, etc.)
○ Raised the prospects of firing a customer who exhibits a low predicted lifetime value, and instead investing resources in other more profitable customers
CRM Process Cycle: Knowledge Discovery
process of analyzing the customer information acquired through various customer touch points
Customer touch points - where the selling firm touches the customer in some way
e.g. POS, internet access
CRM Process Cycle: marketing planning
- Represents a key use of the output from the knowledge discovery phase
○ Includes: employing the marketing communication mix in integrated ways to customize approaches to different customer groups
CRM Process Cycle: Customer interaction
- Represents the actual implementation of the customer strategies and programs
○ Includes: the personal selling effort, as well as all other customer-directed interactions
CRM Process Cycle: analysis & refinement
- Where organizational learning - occurs based on customer response to the implemented strategies and programs
What is the difference between interactive & non-interactive touchpoints?
interactive - allow for two-way information exchange
they involve direct interface between a customer and a firm’s customer contact person
- (e.g., salesperson, telemarketer, customer service representative, interactive website
non-interactive - the customer may simply provide information on a static website’s data entry form or by mail, without the capability of simultaneous direct interface with a company representative
What is the dark side of CRM?
- Customers must be absolutely certain that the information a firm collects and stores about them will not be used for unintended purposes
- collecting customer data raises ethical & legal concerns
- must consider regulatory requirements, which may impose constraints such as what information can be conveyed to the firm within a given marketing campaign or at any touchpoint
- must develop trust
What is a customer-centric culture?
places the customer at the core of the enterprise, including everything that happens, both inside and outside the firm
