CRM - PowerPoint PPT Presentation

Slide1 l.jpg
Download
1 / 15

CRM. MKT 6301 Nanda Kumar http://www.utdallas.edu/~nkumar. Main Issues. Dynamics of customer relationships Monitoring customer satisfaction Mass Customization Using Information Systems to manage customer relationships. Dynamics of Customer Relationships. Satisfied customers

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation

CRM

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Slide1 l.jpg

CRM

MKT 6301

Nanda Kumar

http://www.utdallas.edu/~nkumar


Main issues l.jpg

Main Issues

  • Dynamics of customer relationships

  • Monitoring customer satisfaction

  • Mass Customization

  • Using Information Systems to manage customer relationships


Dynamics of customer relationships l.jpg

Dynamics of Customer Relationships

  • Satisfied customers

    • EV from consuming your product too high

    • Less willing to consider other alternatives or switch (BA example)

  • Short-term vs. Long-term

    • Myopic one period profits vs. customers’ life time value


Related jargon l.jpg

Related Jargon

  • Acquisition costs

  • Base profit – profit margin from an average customer

  • Revenue growth – positively relationship between duration of relationship and profitability

    • Refinancing home mortgage


Other effects l.jpg

Other Effects

  • Operating costs – serving old customers is less expensive

  • Word of mouth (WOM) – referrals

  • Sensitivity to price – old customers less price sensitive


Net effect l.jpg

Net Effect


How much to pay to acquire a customer l.jpg

How Much to Pay to Acquire a Customer?

  • Present Value of a customer expected to be in a relationship for 4 years?

  • Discount rate – I, 10%

  • PV = 40/(1.1) + 66/(1.1)2+72/(1.1)3+79/(1.1)4 = 198.96

  • Cost of acquiring a customer = $80

  • Pay no more than – (198.96 – 80) = 118.96

  • What if not all costs were borne upfront?


Retaining customers l.jpg

Retaining Customers

  • Satisfied customers are loyal customers

  • Expectation confirmation model

    • Is product performance consistent with expectations?

    • Differential between expectations and actual performance influences degree of satisfaction

  • Expectation formation

    • Different information source, WOM, product advertising, past experience


Monitoring satisfaction l.jpg

Monitoring Satisfaction

  • Survey based approaches

    • Measure satisfaction on a scale relative to expectations

    • Relative to competition

    • Track over time to uncover trends in the industry

  • Track consumer complaints


Value management l.jpg

Value Management

  • Customer value Profitability

  • Perceived Quality Customer Value

  • Increase value by increasing perceived quality or value of your package

  • Can be achieved by changing customers’ preferences (Perdue Chicken)


Satisfaction and service l.jpg

Satisfaction and Service

  • Service is critical in some product categories

    • Deere case – how Deere handles downtime will be critical in value delivered by the product

    • Service can help differentiate from competition

    • Firm-customer interactions numerous – some more critical than others


Challenges faced by corporate chains l.jpg

Challenges faced by Corporate Chains

  • Free-riding in Franchising

    • Service levels affect corporate image

    • Individual operators may not have sufficient incentive

    • Cost of monitoring and lack of incentives may influence ownership


Loyalty programs l.jpg

Loyalty Programs

  • Reward card – Tom Thumb

  • Frequent Flyer cards

  • Sears - $100 or more club

  • Generates customer information that can be used effectively


Mass customization l.jpg

Mass Customization

  • Recognition that customers are heterogeneous

  • Product located closest to customers’ ideal point in product space will have the highest value

  • Shoes, Jeans, PCs, Websites customize look and feel


Information systems l.jpg

Information Systems

  • Knowledge about household events – birth of a child etc.

  • Use information to customize mailings and offers

  • Database marketing


  • Login