33:799:301 Lecture 23: Chapter 11 Customer Relationship Management
23 May 2019
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Lecture 23
Chapter 11: Customer Relationship Management
Customer Relationship Management (CRM) = transformation of people, process, and technology
required to become a customer-centric organization.
• Involves acquiring, retaining and partnering with selective customers to create superior value for both
company and customer.
• A means and method to enhance the experience of customers so they’ll remain customers for life.
• CRM is about building and maintaining profitable long-term customer relationships beyond the one-
off buy and sell transaction.
o By….
▪ Focusing on customer requirements
▪ Delivering products and services in a manner resulting in customer satisfaction
o How….
▪ Communicating
▪ Understanding customer behavior/requirements
▪ Building a system to satisfy those requirements
Goals/Benefits Of CRM
• Increased customer satisfaction, loyalty, and, retention
• Faster responses to inquiries.
• Increased revenue.
• Growth of customer base through referrals.
• A simplified/more cost effective marketing & sales process.
• Increase sales effectiveness.
• Increased sales through cross-selling and/or up-selling.
• Access to updated customer information and personalized interactions.
• Automation of repetitive tasks.
Key Tools and Components of CRM
• Predicting Customer Behaviors
o customers buying history, preferences, and trend information can be used to create
accurate forecasts and more effective marketing and sales budgets.
• Personalizing Customer Communications
o When a company communicates with their customers, they need to use the customer’s
“language”.
o sends a message to the customer the company cares about them.
▪ Clickstream: tracking how a customer navigates a website can help tailor a
website’s images, ads or discounts based on past usage of the site.
• Segmenting Customers
o Groups customers to create specialized communications about products.
▪ demographics, income, geography, buying preferences, etc.
• Target Marketing
o Segment of customers a company has decided to aim its marketing efforts and ultimately
its products and/or services towards. A well-defined target market is the first element of
any marketing strategy
o Usually much more effective than mass marketing; allows company to focus efforts on
marketing to those customers most likely to respond.
o Is a more efficient use of the company’s resources and reduces the chances of being a
nuisance to those potential customers who do not fit the targeted criteria.
Document Summary
Customer relationship management (crm) = transformation of people, process, and technology required to become a customer-centric organization. Increased customer satisfaction, loyalty, and, retention: faster responses to inquiries, growth of customer base through referrals, a simplified/more cost effective marketing & sales process, access to updated customer information and personalized interactions, automation of repetitive tasks. A well-defined target market is the first element of any marketing strategy: usually much more effective than mass marketing; allows company to focus efforts on marketing to those customers most likely to respond. Also involves selling the customer extra features or add-ons to an existing product. Example: would you like to super-size your order? : relationship marketing or permission marketing, approach to selling products/services where customer explicitly agrees in advance to receive marketing information. Customers self-select the type/time of communication they want: example: an opt-in e-mail, where potential customer signs up in advance for information about certain products or services.
