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Lecture 11

33:799:301 Lecture Notes - Lecture 11: Permission Marketing, Upselling, Customer Service

Supply Chain Management
Course Code
James King

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Ch 2,4,9,11
Key Tools and Components of Control Relationship Marketing
Cross-selling - Occurs when a company sells an additional related or complementary product or
service to an existing customer after the initial purchase
Up-selling - Involves persuading a customer to buy a more expensive item or upgrade a product
to make the sale more profitable. It also involves selling the customer extra features or add-ons
to the product they are already buying or considering
Personalizing communication - Aimed at specific groups of customers and is likely to result in
greater levels of sales, communication that is personalized sends a message to the customer
that the company cares about them and the relationship is more than a transaction, a way to
differentiate the company from another
Relationship or permission marketing - An approach to selling products and services in which a
customer explicitly agrees to advance to receive marketing info
Customer Defection Analysis - The process of analyzing customers who have stopped buying to
determine why this was it case
Churn is the process of customers changing their buying preferences because they find better
or cheaper products and services elsewhere
- Churn reduction is all of the efforts companies develop to stop losing customers to the
Customer Defection Analysis leads to churn reduction by determining why customers leave and
finding ways to retain them
Customer Lifetime Value
- Prediction of the net profit attributed to the entire future relationship with a particular
- Some customers are worth more than others, identifying your key customers is key to
aligning your customer support resources
- CLV is an important metric for determining how much support to provide existing
customers versus money to spend on acquiring new customers
- It is determined by forecasting the expected revenue generation for each strategic
customer, understanding the margin structure and cost to support each
Customer service is taking care of the customer’s needs and occurs before, during, and after
the customer’s purchase
- Pre-transaction elements precede the sale - customer service policies, mission
statement, system flexibility
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