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Customer Relationship Management - Introduction

Chapter 1.
Introduction to Customer Relationship Management

1.     Old vs. New Marketing


OLD MARKETING
a.       Transaction oriented
b.      Market share oriented
c.       All customers are equal
d.      Marketers sell
e.       4P marketing
f.       Mass marketing
g.      Sell to the customer
h.      Focus on new customers
i.        Offensive
j.        Broadcast oriented
k.      Transaction profit

NEW MARKETING
a.       Relationship oriented
b.      Share of wallet oriented
c.       All customers are not equal
d.      Marketers manage demand
e.       Relationship marketing
f.       Individual marketing
g.      Manage customer experience
h.      Focus on existing customers
i.        Defensive
j.        Dialogue oriented
k.      Customer lifetime value



2.     Five Different Orientations Toward CRM
a.       CRM is software, system, technology.
b.      CRM is data storage and analysis.
c.       CRM is a change in corporate culture à from a transaction focus to a customer centric one.
d.      CRM is “managing demand.”
e.       CRM is a strategy cycle focusing on customers.

3.     A CRM System Contains Four Components
a.       Data warehouse
b.      Analytical tools
c.       Campaign management tools
d.      Interfaces to maintain databases

4.     CRM System Failure
When CRM systems fail, it tends to be as a result of cultural as opposed to technological issues.

5.     The Market Share Fallacy
Increasing market share should not be a company’s goal. Rather, increasing share of the right kinds of customers should be the goal.

6.     CRM is Founded on Four Tenets
a.       Customers should be managed as important assets.
b.      Not all customers are equally desirable.
c.       Customers vary in their needs, preferences, and buying behavior.
d.      By better understanding their customers, companies can tailor their offerings to maximize their overall value.

7.     CRM Advantage



8.     Definition
“Customer Relationship Management is the initiation, enhancement, and maintenance of mutually beneficial customer and partner long-term relationships through business intelligence-generated strategies based on the capture, storing, and analysis of information gathered from all customer and partner touch points and transaction processing systems.

Baran, Galka, Strunk

9.     Do You Want To Keep These Customers?
a.       Do not buy frequently
b.      Buy your products only when they are on sale
c.       Frequently return your merchandise
d.      Complain a lot
e.       Recommend your company to others just like them

10.            Offensive vs. Defensive Marketing
a.       Offensive Marketing refers to increasing your customer base.
b.      Defensive Marketing refers to activities aimed at existing customers.
o   Defensive Marketing has become more profitable. “Mass and Blast” is being replaced by 1:1.

11.            Why CRM Systems are Being Used
a.       Identifying prospects
b.      Acquiring customers
c.       Developing customers
d.      Cross-selling and up-selling
e.       Managing migration
f.       Servicing
g.      Retaining
h.      Increasing loyalty
i.        Winning back defectors

12.            Four Basic Step in CRM
a.       ID your customers in detail.
b.      Differentiate the most and least profitable.
c.       Interact.
d.      Customize your offerings to fit each                   customer’s needs.

13.            CRM Systems
Allow companies to ID and focus on their high-profit customers while enabling companies to transform low-value customers into higher-value ones.

14.            Retail Banks Have Realized the Following Benefits from CRM Benefits
a.       Increase in average products sold per customer over one year from 4.6 to 6.2
b.      3-5 percent decrease in administrative costs
c.       200 percent return on technology investment through cost reduction over one year
d.      96 percent reduction in average time for a CCC agent to refer a customer to a branch loan office
e.       83 percent decrease in average customer info retrieval time
f.       15 percent increase in product revenue in one year

15.            A Customer Focus Can Aid Retention
a.       Annual Defection Rates
o   Newspaper subscriptions                    66 percent
o   Residential tree and lawn care            32 percent
o   U.S. long distance telephone              30 percent
o   Clothing catalogues                            25 percent
o   Internet service providers                   22 percent

(Griffen and Lowenstein, 2001)

16.            Customer Retention and Profits
a.       Increase retention 5 percent and improve profitability in net present value from 20-85 percent.
b.      It costs five to ten times more to obtain a new customer than it does to keep an existing one.

17.            The Objectives of CRM




a.       ID potential customers
b.      Understand needs
c.       Differentiate dollars and cents
d.      Decrease attrition
e.       Increase usage
f.       Increase cross usage
g.      Increase usage of more prestigious items
h.      Increase satisfaction
i.        Integrate marketing and sales throughout channels
j.        Improve campaign management
k.      Increase referrals
l.        Win back lost customers
m.    Move customers up relationship hierarchy
o   Strangers
o   Acquaintances
o   Friends
o   Partners



18.            Multichannel Marketing
a.       Over half of all customers in certain industries (apparel and banking) are using multiple channels for shopping and purchasing: store, telephone, ATM/Kiosk, catalogue, online, etc.
b.      Multiple channel users have two to four times more to spend. In retail banking they are 25-50 percent more profitable.

19.            Customers Transact Business Through the Following Channels
a.       Web application
b.      Free form e-mail
c.       Telephone with a live agent
d.      Internet VOIP through a live agent
e.       Text chat with a live agent
f.       Telephone through an interactive VRS
g.      Fax
h.      ATM/Kiosk
i.        Entering the store or branch

20.            Which Companies Benefits Most from CRM?
a.       Companies serving large numbers of customers through complex and frequent interactions:
o   Communications companies
o   Retail banks
o   Insurance companies
o   Healthcare organizations
o   Utilities
b.      Companies with a steep skew
c.       Companies in “lost for good” markets

21.            Which Companies Benefits the Least from CRM Today?
a.       Companies that engage in minimal interactions with each customer
o   Auto dealers
o   Government agencies
b.      Companies with simple transactions
o   Movie theaters
o   Retail stores



Tambahan, BACA JUGA  CRM - Business Environment

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