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1st Pillar of CRM - Coggle Diagram

- - - - Develop & delivers best product/services to customers
    - - Offers low costs to customers by operating with efficient supply chains.
    - - Create personalized products/services to meet the needs/preferences of customers through mass customization.
  - - - Extra charges (interest & warranty charge). Companies can reduce the price by removing any hidden charges & reducing retail prices.
    - - Time & effort taken before purchasing (comparing different choices). Increasing distribution channels can reduce customer's time & effort when making a decision
    - - Factors that may induce stress on the customers, creating a 'perceived risk' when customers decide to make a purchase.
      - Financial Risk, Performance Risk, Physical Risk, Social Risk, Psychological Risk
- - - - Short term & single sale focus
      - Product & Sales centric, not interested in maintaining relationship with customers, Neutral customer experience.
    - - Long-term & customer retention focus
      - Benefits
        
        Lower Cost
        
        The cost to serve existing customers are lower as compared to acquiring new customers since processes become automated over time.
        
        Build Loyalty
        
        Customers are less likely to switch to competitors when the relationship, trust and commitment with the brand is strong.
        
        Increase Revenue
        
        Repeat purchases, cross-selling and up-selling gives opportunity to increase wallet share of customers. Customers are willing to pay a higher price since they are less price sensitive.
  - - - Action based; financial contribution to the brand
      - Quantitative sales statistics
      - Determined by: Recency (recency of last purchase), Frequency (amount of purchases made) & Monetary Value (value of purchase)
    - - Emotional based; emotional bond with the brand
      - Qualitative surveys
      - Determined by: Customer satisfaction, Intention to repurchase, Willingness to recommend
    - - True Loyalty (High repeat purchases, Strong perception of brand)
        
        eg Apple
      - Spurious Loyalty (High repeat purchases, Weak perception of brand)
        
        eg buying water from the stalls at the entrance of school since it is convenient.
      - Latent Loyalty (Low repeat purchases, Strong perception of brand)
        
        eg Burberry, Yves Saint Laurent, Versace
      - No Loyalty (Low repeat purchases, Weak perception of brand)
- - - - Dividing market into homogenous subset.
      - Create different value propositions for each group of customers.
      - Based on common characteristics
      - Market segmentation process
        
        Identify business
        
        Product oriented
        
        Focus on products, might overlook competitors, might neglect potential customers
        
        Business oriented
        
        Focus on value of customer, better understanding of competitors, expand boundaries of market
        
        Identify segmentation variables
        
        Demographic
        
        eg Female aged 22 with an income of $1.2k per month
        
        Geographic
        
        eg Singapore, Asia, Southeast Asia, International etc
        
        Psychographic
        
        eg Likes cycling, Risk taker
        
        Behavioural
        
        eg Goes to the cinema once a month
        
        Analyse market using variables
        
        Assess value of market segments
        
        Super Growth Customers
        
        Most Valuable Customers
        
        Most Growable Customers
        
        Low Maintenance Customers
        
        Below Zero Customers
        
        Select market segment
        
        Size (Select market that has significant number of potential customers)
        
        Company Competency (Select market that match their core competencies)
        
        Competitors (Select market that has lesser strong competitors)
        
        Growth Potential (Select markets that are growable in the future)