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Ch14 - Customer Relationship Management - Coggle Diagram
Ch14 - Customer Relationship Management
Customer Relationship Management (CRM)
Customer Satisfaction
For CRM to be successful, need attitude changes in organization
CRM started as tool to help sales force keep track of customers & prospects but has evolved into much more
Funneling info to one place that otherwise would be dispersed in a big company allows all employees to access one customer profile instead of bits & pieces of information about customer scattered throughout company
Customer Experience Management (CEM)
Managing customer interactions to build brand equity & improve long-term profitability
Requires strategy to manage all points of customer experience, as keeping customers satisfied will be more important than simply making sale
Focuses on customer interactions or touch points
Ideally, CEM info analyzed to gain insight into each customer's needs & behaviour, then used to improve customer's dealings with company
Analysis might guide promo efforts so customer receives mailings, calls, emails, website advertising tailored to their likes
Touch points
Any customer interaction with brand or company. Customer interactions inc. every point customer interacts with business, product, service
Orgs should measure improve customer interactions on ongoing basis
Levels of customer satisfaction at each touch point can be a better measure of customer loyalty than just measuring overall customer satisfaction
Starts by understanding & listing each individual interaction or touchpoint that influences customer satisfaction
CEM & touch points used to maintain profitable rela with customers & used in various industries to enhance customer satisfaction
Over time, businesses have used tech to leverage time connecting with customers. Knowing when to contact members maximizes effort
Cultural Changes
CRM at Four Seasons Hotels & Resorts
Cultural attitudes of organization must change internally to what CRM culture if company is really interested in instituting positive customer service
Management must understand customer & drive org to developing best experience
Top-management support to align internal processes toward org's CRM strategy is critical to CRM program's success
CRM at WestJet
Average business executive goes into CRM thinking it's only about technology, but if cultural attitudes don't change, employees won't benefit from info collected & analyzed
Without employees using system, software becomes useless
Most senior levels of management need to embrace business startegy of CRM & move message & tactics of CRM throughout organization
Gaining loyal customers is critical to successful CRM strategy. Questions to ask:
Who are your most profitable customers
Why do your customers buy from you and not competition
What percentage of your customers are profitable
How can you make profitable customers do more business with you
How do you place on managing less profitable customers
CRM at TD Canada Trust
Facts
CRM databases allow companies to get closer to their customers to establish mutually beneficial rela
Orgs failure with CRM often result of approaching CRM as software project rather than overall company strategy
Collecting & managing data is just one component of CRM - More important is organizational culture & support from top management
CRM requires top-down long-run commitment & attitude change by management
BLUERUSH
Creates personalized digital customer experiences that generate leads, build loyalty, increase sales
INDIVIDO & ActivDialog (products of BLUERUSH) integral part of customer lifecycle management program. Significantly transforming online exp & delivering real value to clients & their customers
Tools needed to be adopted by client-facing individuals & to be driven by management
Social Media & CRM
Tourism & Social Media
More orgs are taking tactic to new lvl, trying to listen in on every mention of their brands for real-time gauge of what ppl think of their offerings, competitors, industry trends
Consumers are using social like Tw to contact airline instead of calling
If lost luggage or missed flight, the immediacy of SM based feedback could render toll-free numbers & website feedback forms obsolete in near future
Airlines that use SM turn disappointed customers into happy ones or enhance travel exp, are setting themselves apart & building loyalty
Engagement created by SM can't be ignored as it may have consequences
Credibility Issues of Social Media
Orgs want to encourage consumers to say positive things about brand on SM
Ford believes SM is means to attract tech-savvy consumer, & relaunch similar SM campaign in 2014
Customer Acquisition & Retention
Loyalty Programs
Programs specifically designed for customer retention
Oldest & best-known in CA is Canadian Tire Money
Have become a way for orgs to differentiate self from others, but these differentiations have high expectations from CAs
Pareto's Rule
Marketing rule of thumb named after Italian economist Vilfredo Pareto
80% of a brand's sales come from 20% of its customers
Heavy users should be rewarded differently than light users
Implication here is to take special care of 20% by offering them better rewards than remaining 80%
Companies that surprise & delight high-profit customers with rewards programs more likely to keep customers in long run
Provides businesses with lots of info about their customers
Privacy
CA gov has extended responsibilities of Office of the Privacy Commission of Canada to private sector
Acts as advocate for CAs on their rights to privacy
Personal Information Protection & Electronic Documents Act (PIPEDA)
Established rules for how personal info handled during course of business
2014 - CA gov intro anti-spam legislation to protect CAs from unwanted communications & threats
Facts
CRM starts by building customer relationships - Data-driven programs examine profiles of org's most-popular customers & use these characteristics to find prospective customers. After org finds commonalities in profitable customers, use info to target this group
When rela established, CRM shifts to maintaining profitable customer rela
Making sale to current customer is less expensive than selling to new customer
Listening to customers is important is as, if not more important than talking to them
Why CRM can increase profitability through customer retention is explained by following factors
Cost of acquiring customer occurs only at beginning of a rela, so longer the rela, lower the amortized cost
Long-term customers tend to be less inclined to switch, & tend to be less price-sensitive
Long-term customer may initiate word-of-mouth activity & referrals
Database Marketing
Org's collect, process & analyse info on their customers, potential customers, & competitors. This allows them to better recognize customer needs & adjust accordingly to meet & exceed expectations
Data Mining
Efficient way to sort through large amounts of data to find rela between variables
Process of analyzing customer patterns & insights to make better marketing decisions
Helps to target customer segments & their needs
Effective integration of data mining in org's CRM strategy will allow for improved customer service & sales performance
Data Warehouse
Electronics library where all info indexed. Once data warehouse brings data together, org uses data mining techniques to find insights about customers
Customer Lifetime Value
Focus on value customer brings if they remain loyal to firm over customer's lifetime
Share of Wallet
CRM techniques can help marketers get larger share of customer's purchases from that company
CRM & Customer Reacquisition
First step in customer recovery is find customer who is in jeopardy of being lost to org
Longer customers stay away from business, less likely they are to return
After lapsed customers ID, second step is contact them to determine why they stopped buying & potentially prepare appropriate offer
If problem resolved, lapsed customer may become very loyal customer cause firm shown interest in customer
Retaining Marginal Customers
CRM allows firms to use info tech to quantify value of individual customers in terms of sales & profits
High-value customers provided with better privileges, discounts, etc.
CRM analysis shows small proportion of customers contribute to large % of profits, & many customers are unprofitable
Many firms beginning to jettison or fire low-value customers & focus on high-valued customer
Danger to this is if company is left with only high-value customers, leaves org open to poaching by competitors if they are aware of its customer base