CRM

Relationships change over time. Parties become closer or more distant; interactions become more or less frequent. Because they evolve, they can vary considerably, both in the number and variety of episodes, and the interactions that take place within those episodes. Dwyer has identified five general phases through which customer-supplier relationships can evolve.

1 Awareness.2 Exploration.3 Expansion. 4 Commitment. 5 Dissolution.

Hofmeyr suggests that companies can measure customer commitment by asking just four questions:

1. How happy are you with < whatever it is > ? 2. Is this relationship something that you care about? 3. Is there any other < whatever it is > that appeals to you? 4. If so, how different is the one < whatever > from the other?

service quality perspectives

1. Quality is conformance to specification- business specifies what counts as quality, and measures its performance to that standard. example is producing error free invoices or acknowledging customer complaint in 24 hours 2. Quality is fitness for purpose- creating products that meet customer expectations, customer determines quality not company

Michael Treacey and Fred Wiersema have suggested that successful companies offer one of three value propositions to their customers:

1. low price- companies with this do a limited number of things at low cost and pass on those savings to customers; these companies tend to operate lean manufacturing and efficient supply chains, rigorous cost control 2. product innovation- aim to provide best products, services, or solutions to customers 3. customized solutions- able to adapt their offers to meet the needs of individual customers, must be based on customer insight

Service Level Agreement (SLA)

A contractual commitment between a service provider and customer that specifies the mutual responsibilities of both parties with respect to the services that will be provided and the standards at which they will be performed

Non-customers are segmented according to commitment scores into four availability subsets: available, ambivalent, weakly unavailable and strongly unavailable.

Available non-customers- prefer the alternative to their current offer & are ready to switch ambivalent non customers- are as attracted to the alternative as they are to their current brand weakly unavailable non customers- prefer their current brand strongly unavailable non customers- have a strong preference for their current brand

CRM definition

CRM is the core business strategy that integrates internal processes and functions and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high-quality customer-related data and enabled by information technology.

IDIC Model

Identify- who your customers are and build a deep understanding of them Differentiate- your customers to identity which have the most value now and which offer the most for the future Interact- with customers to ensure that you understand their expectations and relationships with other brands Customize- the offer and communications to ensure that customers expectations are met

value in exchange

Value-in-exchange is the exchange of one form of value for another. In developed economies value-in-exchange takes the form of money being exchanged for a good or service at the point of sale. One form of value (the good or service) is exchanged for another (money). In less developed economies, barter is a common non-monetized form of value-in-exchange, goods or services being exchanged for other goods or services.

value in use

Value-in-use holds that value is realized only when customers possess, use, consume or interact with the good or service. Until consumers perform these actions, goods are simply inert bundles of attributes - they have no value whatsoever. This perspective on value suggests that value is 'not what the producer puts in, but what the customer gets out'. Firms can only create value propositions.

strategic CRM

a core customer-centric business strategy that aims at winning and keeping profitable customers

SERVQUAL

a multiple-item scale used to measure service quality across dimensions of tangibles, reliability, responsiveness, assurance, and empathy -identifies 5 dimensions of service listed above (RATER)

business process

a set of activities performed by people and/or tech in order to achieve a desired outcome (page 175)

total quality management (TQM)

a structured approach to business management that aims to improve the quality of products and processes by learning from the objective and systematic feedback of important stakeholders, including customers. -TQM promotes "zero defects" in manufacturing where it reduces costs and improved quality effectively

service recovery

all actions taken by a company to resolve a service failure; companies who resolve issues quickly have higher customer satisfaction

SERVQUAL plus

also considers emotions, peer to peer interactions, the way consumers use the product, the relationship between supplier and buyer, and brand communication and image

service guarantee

an explicit promise to the customer that a prescribed level of service will be delivered, can be specific about certain part of the customer experience or more general; from customers perspective service guarantees can reduce risk and increase customer perceived value

Brand (def)

any name, design, style, words, or symbols that distinguish a product from its competitors

participant observation

companies can develop a better understanding of customer experience by participating in the customer experience at various touchpoints; sometimes senior management proves front line customer service to understand what it is like for the customer

customization

companies must be aware of and responsive to customers differing requirements; strategic because it generates competitive advantage and is appealing to customers BUT costly for the company and could mean loss of economies of scale and increasing unit costs

physical evidence

consists of all tangible facilities, equipment, and materials that companies use to communicate value to customers including websites, corporate uniforms, print materials etc

value in experience

customers can experience value when they interact with or are exposed to any marketing, sales, or service output of the firm throughout the customer lifecycle

positive customer experience

describes customer experience as it is; value free and objective statement of what it is like to be a customer

normative customer experience

describes customer experience as management or customer experience believe it ought to be; value-based judgement of what the experience should be like for the customer

product based value

experienced by customers when they benefit from product innovation, incremental benefits, product service bundling, and branding (page 164)

Operational CRM

focuses on the automation of customer-facing processes such as selling, marketing and customer service

Study by Klaus and Maklan EQX

found that CX is a holistic concept that includes search, purchase, consumption, and use phases of the customer lifecycle and it is a composite outcome of some elements within managements control (marketing mix & service quality), and some outside managements control (customers objectives and social context)

Operational CRM

involves application of tech in the consumer facing function of sales, marketing, and service. -can influence customer experience through customer being recognized, their needs better being understood, order fulfillment and billing more accurate, communications more relevant and timely, service more responsive and reliable

percieved risk

is a consideration in assessing psychic cost. Perceived risk takes a variety of forms - performance, physical, financial, social and psychological. page 155

Analytical CRM

is a process through which organizations transform customer related data to actionable insight for strategic or operational

product service bundling

is the practice of offering customers a package of goods and services at a single price. Tour operators routinely bundle several elements of a vacation together - flights, transfers, accommodation and meal plan, for example. For the customer, bundling can reduce money, transaction and psychic costs. For the company, there are economies in selling and marketing

zero defections

loss of no customers to competitors because of poor quality service experience; Reicheld and Sasser promoted this in "Quality comes to service"

experience mapping

process that involves striving to understand, chart, and improve what happens at consumer touchpoints. focus groups, face to face interviews and telephone interviews are done with sample of customers where they ask "What is the experience like" and "how can it be improved"

Analystical CRM

process through which organizations transform customer related data into actionable insight for strategic or tactical purposes -if done well customers receive timely and relevant communications and offers

Pre-testing messages on a sample of potential new customers is a way to improve the chances of an ad achieving its objectives. Among the criteria you can assess are the following:

recall- how much of the ad can the sample recall comprehension- does the sample understand the ad credibility- how believable is the ad feelings evoked- how does the sample feel about the ad intention to buy- how likely is it the sample will buy

mystery shopping

recruitment of paid shoppers to report on their customer experience usually used in B2C context

customer experience

the cognitive and affective outcome of the customers exposure to or interaction with products, services, technology, people, processes and other outputs

Value

the customer's perception of the balance between benefits received from a product or service and the sacrifices made to experience those benefits. Value=Benefits/Sacrifices sacrifices=money, time, transaction costs (searching for solutions, negotiating with suppliers), psychic costs (stress) page 155

value proposition

the explicit or implicit promise made by a company to its customers that it will deliver a particular bundle of value creating benefits

customer experience management

the practice of designing, implementing and improving customer experiences at organizational touchpoints; focus on implementing CRM tools and tech

mass customization

the use of flexible processes and organizational structures to create varied and even individually tailor value propositions to order. most cases this is achieved with only a limited cost or lead-time penalty

Nordic service quality model

three components to service= technical, functional, reputational (page 168)

A core principle of CRM is that customer-related data are used to target acquisition efforts accurately.

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A customer or market-oriented company shares a set of beliefs about putting the customer first.

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Advertising is the creation and delivery of messages to targeted audiences through the purchase of time or space in media owned by others.

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CRM is an information industry term for methodologies, software and usually Internet capabilities that help an enterprise manage customer relationships in an organized way

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CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high-quality customer-related data and enabled by information technology.

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Canvassing involves making unsolicited calls, sometimes known as cold calls. This can be a very wasteful use of an expensive asset - the salesperson. Some companies have banned their salespeople from cold-calling.

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Companies need to nurture their relationships with committed customers, reassuring them that their decision is wise, and finding ways to enrich and enhance their customer experience. The strategy for uncommitted customers is to investigate why there is a low level of commitment and address the causes. Maybe it is a low-involvement category, or maybe customers are dissatisfied with their experience.

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Networking is the process of establishing and maintaining business-related personal relationships.

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Product-oriented businesses believe that customers choose products with the best quality, performance, design or features. These are often highly innovative and entrepreneurial firms. Many new business start-ups are product-oriented. In these firms it is common for the customer's voice to be missing when important marketing, selling or service decisions are made. Little or no customer research is conducted. Management makes assumptions about what customers want and/or provides visionary leadership for the market.

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Production-oriented businesses focus on operational excellence. They seek to offer the customers the best value for money, time and/or effort. Consequently, they strive to keep operating costs low, and develop standardized offers and routes to market. Complexity, customization and innovation are very costly and unappealing to production-oriented businesses. Production-oriented firms rarely are first to market with the best new offer.

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Prospecting is an outcome of the market segmentation and targeting process. Market segmentation divides a heterogeneous market into homogenous subsets, even down to the level of the unique customer. Targeting is the process of choosing which market segments, clusters or individuals to approach with an offer.

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Sales Force Automation (SFA) applies technology to the management of a company's selling activities. The selling process can be decomposed into a number of stages such as lead generation, lead qualification, lead nurturing, needs identification, development of specifications, proposal generation, proposal presentation, handling objections and closing the sale. SFA software can be configured so that it is modelled on the selling process of any industry or organization.

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Sales-oriented businesses make the assumption that if they invest enough in advertising, selling, public relations (PR) and sales promotion, customers will be persuaded to buy.

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CRM features that improve customer experience

usability, flexibility, performance, scalability (page 203)

Non-participant observation

when the researcher observes behavior without participating in that behavior