CRM Midterm

What is visual identity?

visual identity is a way to represent the brand through critical components: names, logos, typefaces, and colors.

What is customer churn?

Customer churn aka customer attrition is the lost of clients or customers.

What is customer experience?

Customer experience is the cognitive and effective outcome of the customer's exposure to, or interaction with, a company's people, processes, technologies, products, services and other outputs.

What is customer retention?

Customer retention is to keep a high proportion of valuable customers by reducing customer defections (churns). This is also the number of customers doing business with a firm at the end of financial year expressed as percentage of those who were active customers at the beginning of the year. 3 stages of customer life cycle: 1. customer acquisition 2. customer retention 3. customer development

What are value-based attachment?

Customers may develop a strong sense of emotional attachment when their personal values align with those of a company

What is experience mapping?

Experience Mapping is strategic process of capturing and communicating complex customer interactions

Key performance indicators (KPI) of customer acquisition programs

KPI = Key Performance Indicators of customer acquisition programs - How many customers are acquired? - What is the cost per acquired customer? - What is the value of the acquired customers?

Major relationship attributes (2)

Major relationship attributes are trust and commitment.

Define market segmentation

Market segmentation is the process of dividing up a market into more-or-less homogenous subsets for which it is possible to create different value propositions

What is marketing automation?

Marketing automation is application of computerized technologies to support marketers and marketing management in the achievement of their work-related objectives

What are retention strategies?

Negative - Create exit barriers - Enforce the contract - Extract switching penalties Positive - Delight customers - Create customer-perceived added value - Create social and structural bonds Create customer engagement

How to assess potential value of segmentation opportunities

Size of segment, growth rate, price sensitivity, bargaining power, customers relationship, barriers to segment, number and power of competitors, prospect of new entrants, potential differentiation

Sources of customer value

Source of customer value - Service - Savings - Coolness - Entertainment - Utility -Convenience

What is strategic crm?

Strategic CRM - is a cores customer-centric bisness strategy that aims at winning and keeping profitable customers

Key touch points

Touch points are customers initiation the interactions; search and comparison tools, customized services, store loyal programs. - Key Touch Points are: Websites, service centers, warehouses, contact centers, exhibitions, seminars, retail stores

Define value

Values are core beliefs that transcend context and serve to organize and direct attitudes and behaviors

Benefits of marketing automation

- Greater marketing productivity - Enhanced marketing efficiency - More effective marketing - Improved accountability - Enhanced responsiveness - Improved marketing intelligence - Improved customer experience - Improved customer engagement

What is the relationship between customer satisfaction and retention?

- If customers are satisfied, you are more likely to retain them. - But also need customer engagement

List 5 popular techniques for acquiring new customers (Rank by most likely result in high lifetime value customers and explain)

- Lead management : process includes a number of sub processes, including lead generation , lead qualifications, lead allocation and lead tracking - Campaign management: design, executes and measure marketing campaigns with support of CRM technologies. Sometimes these multimedia campaigns across direct mail, email, fax, outbound telephony and sms platforms - Event based marketing: provides companies with opportunities to approach prospects at times which have a higher probability of leading to a sale - referrals - events - shows - publicity - telemarketing - SMS and email campaigning - Product placement and integration - Pitching

Customer engagement

- More likely to retain customers if they are engaged with company 4 types of engagement - Cognitive engagement - Affective engagement - Behavioral engagement - Social engagement o Word of mouth o Feedback

Key performance indicators of customer retention programs

- Raw customer retention rate (and in each customer segment) - Sales-adjusted retention rate (and in each customer segment) - Profit-adjusted retention rate (and in each customer segment) - Cost of customer retention - Share of wallet of the retained customers - Customer churn rate per product category, sales region or channel - Cost-effectiveness of customer retention tactics

Define value retention

- Retain customers that contribute value - Retention of share of wallet

Key components of customer service

- Touchpoints - Moment of truth - Engagement

When do customer experience value?

- Value in exchange: value is created by the firm, embedded in products, distributed to the market, and realized when those products are exchanged for money - Value in use: value is realized only when customers possess, use, consume or interact with the good or service - Value in experience: customers can experience value as they interact with or are exposed to any marketing, sales or service output of the firm throughout the customer life cycle.

What are the 7 P's?

- product - price - promotion - place - process - people - physical evidence

7 core customer management strategies

- protect the relationship - re-engineer the relationship - grow the relationship - harvest the relationship - end the relationship - win-back the customer - start a relationship

What is RFM?

RFM measures behavioral loyalty - R = time elapsed since last purchase - F = number of purchases in a given time period - M = monetary value of purchases in a given time period (Recency, Frequency, Monetary Value) - Two types of loyalty: behavioral and attitudinal

What are the relationship management theories?

Relationship management theory: Five schools of thoughts 1. Industrial Marketing and Purchasing IMP school 2. Nordic school 3. Anglo-Australian school 4. North American school 5. Asian (guanxi) school

Define SEO

SEO = Search engine optimization

What is SFA?

SFA = Sales force automation - the application of computerized technologies to support salespeople and sales management in the achievement of their work-related objectives.

What is sales promotion?

Sales promotion is any behavior triggering temporary incentives aimed at prospects, customers, channel partners or salespeople types of sales promotions: sampling, free trails, discounts, coupons, rebates, bonus pack, lotteries, etc.

Gartner's competency model of CRM (8 components)

1. CRM Vision: leadership, social worth, value proposition 2. CRM Strategy: objectives, segments, effective interaction 3. Valued Customer Experience: understand requirements, monitor expectations, satisfaction vs competition, collaboration and feedback 4. Organizational Collaboration: culture and structure, customer understanding, people: skills, competencies, incentives and compensation, employee communications, partners and suppliers 5. CRM Processes: customer life cycle, knowledge management 6. CRM Information: data, analysis, one view across channels 7. CRM Technology: application, architecture, infrastructure 8. CRM Metrics: cost to serve, satisfaction, loyalty, social costs (vision, strategy, valued customer experience, organization collaboration, processes, information, technology, metrics)

B2B Customers differ from B2C customers

1. Fewer in number 2. Bigger in size 3. Closer relationships with suppliers 4. Derived demand 5. Professional buying 6. Market segmentation

What is a new customer?

2 types of new customers - New to category customers: are customers who have either identified a new need or have found a new category of solution for an existing need - New to company: are customers won from competitors

Types of CRM

4 types of CRM: - Strategic CRM - is a cores customer-centric bisness strategy that aims at winning and keeping profitable customers - Operational CRM - focuses on the automation of customer facing processes such as selling, marketing and customer service - Analytical CRM - focuses on the intelligent mining of customer related data for strategic or tactical purposes - Collaborative CRM - applies technology across organizational boundaries with a view to optimizing company, partner and customer value.

Dwyer's 5 phase of customer-supplier relationship evolution

5 phases of customer supplier: 1. Awareness 2. Exploration 3. Expansion 4. Commitment 5. Dissolution

Payne and Frow's 5 process model

5 process model: 1. The strategy development process 2. The value creation process 3. The multi-channel integration process 4. The performance assessment process 5. The information management process

Define brand

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

What is portfolio?

A portfolio is the collection of mutually exclusive customer groups that comprise a business's entire customer base

What is a relationship? How do you know if you are in one?

A relationship is composed of a series of interactive episodes between parties over time. It is a social construct and can be unilateral or reciprocal. High quality relationship require trust and commitment, also relationship satisfaction, mutual goals, cooperative norms.

What is activity based costing and why is it important for customer portfolio management?

Costing method that identifies activities in an organization and assigns the cost of each activity with resources to all products and services according to the actual consumption by each

What is analytical crm?

Analytical CRM - focuses on the intelligent mining of customer related data for strategic or tactical purposes

What is the Anglo-Australian relationship management theory?

Anglo-Australian theory - Customer markets: 1. Internal markets 2. Referral markets 3. Influence markets 4. Recruitment markets 5. Supplier/Alliance markets

What is the Asian relationship management theory?

Asian (guanxi) school - foundations of guanxi are Buddhist and Confucian teachings regarding the conduct of interpersonal interactions - guanxi refers to the informal social bonds reciprocal obligations between various actors that result from some common social context, for example families, friendships and clan memberships. - these are special types of relationships which impose reciprocal obligations to obtain resources through a continual cooperation and exchange of favors.

What is CLV?

CLV = Customer Lifetime Value: is the present-day value of all net margins earned from a relationship with customer, customer segment or cohort.

Define CRM

CRM (customer relationship management) is information industry term for methodologies, software, and usually internet capabilities that help an enterprise manage customer relationships in an organized way

Characteristics of commitment

Characteristics of commitment: - commitment arise from trust, shared values, and the belief that partners will be difficult to replace. - commitment motivates partners to co-operate in order to preserve relationship investments - commitment means partners forgo short term alternatives in favor of more stable, long term benefits associated with current partners - commitment entails vulnerability, leaving partner open to opportunism

What is collaborative crm?

Collaborative CRM - applies technology across organizational boundaries with a view to optimizing company, partner and customer value

What is the conversion model?

Hofmeyr's conversion model - Hofmeyr's basic premise is that customers who are not committed are more likely to be available to switch to another provider - Commitment is a function of satisfaction with the brand or offer, the alternatives, and involvement in the brand or offer. 4 questions: 1. How happy are with ___ 2. Is this relationship something you care about? 3. Is there any other ___ that appeals to you? 4. If so, how different is the one ___ from the other?

What is IDIC?

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

What is IMP relationship management theory?

IMP = Industrial Marketing and Purchasing - Focuses on B2B (business to business) context - Argues that B2B transactions occur within the context of broader, long term relationships, which are, in turn, situated within a broader network of relationships - Any single B2B relationship between supplier and customer is composed of activity links, actor bonds and resource ties

What is ISIC?

ISIC = International Standard Industrial Classification

Define prospecting

In CRM, prospecting means searching for opportunities that might generate additional value for the company. This is an outcome of the market segmentation and targeting process.

What is the Nordic relationship management theory?

Nordic school - emphasizes the role of service in supplier customer relationship - Identifies three major characteristics of commercial relationship - interaction, dialogue, and value - known collectively as the 'triplet of relationship marketing'

What is the North American relationship management theory?

North American school - links successful inter-firm relationships to excellent business performance - relationships reduce transaction costs - focus on trust and commitment - views relationships as tools that a well run company can manipulate for competitive advantage - focus on dyadic relationships rather than networkds

What is online marketing?

Online Marketing is a process of creating value by building and maintaining online customer relationships.

What is operational crm?

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

Define TQM

TQM = Total Quality Management - every staff member must be committed to maintaining high standards of work in every aspect of a company's operations