Principles of Marketing

Chapter 16- Customer Relationship

Management

Customer Relationship Management

Defined: Management of relationships with
your clients
There needs to be some relationship
management with customers since they are key
to your success:
Buy products
Cocreate products and information

Terms to Understand
Stakeholder- Anyone/anything that has an
interest in how a resource is managed.
Sometimes broken out into different levels
Shareholders are at a different level than the business
community where the firm operates.

Customer- arguably the most important

stakeholder since without them, there is no
firm
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CRM
CRM can also generate leads - potential
customers
We can look at previous data to see who is a
potential customer of a new product, etc. by
focusing on their behavior.

CRM
Customer-centric and Customer driven
Customer-centric is where the decisions are made
with the customers in mind
Customer driven is when the consumers take over
some of the firms business processes, like with
airlines allowing self-checkin,

CRM
Operational CRM- Supporting the front
office business processes (sales, marketing,
services, etc.)
Online through CRM software or just through the
presentation of the user experience

CRM
Analytical CRM- Analyzes data collected by a
business to determine information about customers
that can inform sales and marketing decisions.
Data mining is a component of this
Previous purchase behaviors and even search behavior
can give a wealth of information about customers.
Other customers who searched for X also liked
Sales-force automation is CRM for the management of
the salesforce.

CRM
Collaborative CRM- Combination of all
customer data across all channels to ensure the
best experience

CRM
CRM can be viewed from a
Marketing perspective by increasing the number of
people who know about your service or product
Sales perspective by turning those that know about
the service or product and purchasing the service
or product
Service perspective by ensuring that people who
have interacted with you are satisfied and
delighted
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CRM
A first step for CRM is to understand the value
of each relationship. Can be based:
Only on sales
Only on the cost of acquiring that customer
Lifetime value of the customer
On additional referrals
Etc.

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CRM
CRM to aid in emarketing tactics
First step is gaining permission. No one likes to be
sold without their knowledge
With this permission usually comes an email
exchange as email is one of the most efficient ways
to stay in contact with consumers.

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CRM
CRM to aid in emarketing tactics
Online advertising is beneficial but tricky.
Consumers want ads when they want them, not before
or after and not too much nor too little..

Affiliated marketing can be beneficial since it is

bringing customers into the process and arguably
the best at targeting, but it is difficult to control the
message.

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CRM
CRM to aid in emarketing tactics
Search engine marketing (SEO, PPC, etc.) can be
beneficial, but again can be difficult to measure
what is working and what isnt.
Social Media marketing- Social media can
generate a lot of information, but that information
can be pretty useless at times, so sifting through
the garbage can be difficult.

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CRM
Customer service Rapidly changing with the ease of the internet and
other electronic means.
Previously, calling would have been the most
common, but now email has become the most
prominent.
Text messaging is also becoming a regular method
of interaction
UPS tracking, etc.
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CRM
Customer service Call centers- Still prominent, but often have a bad
connotation for one reason or another.
Training and integration are improving and so are
perceptions, but call centers still have issues with
the negative perception.

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CRM
Customer service Chat and instant messaging are also gaining in
popularity due to simplicity and ability to be
clearer than a call center (at times).
Anecdotal experience- I cant remember the last
contact area I visited that didnt have a chat
function.***

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CRM
Analysis of CRM data
Once data is collected and in a form that can be
utilized, CRM really becomes important.
As stated before, we can map behaviors and can
almost get an exact number for how much a
customer is valued at with good, aggregated
data.

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Vendor Relationship Management (VRM)

A new way of looking at the relationship context.
Vendors often have very good information on
customers that other chain members do not, so
through their integration and knowledge sharing,
there can be better value for all members.
Coupons where information is shared, possible nondirect campaigns to vendors instead of retailers, etc.

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