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Customer Relationship Management Strategies. Chapter 4. Customer Relationship Marketing. Why do some companies succeed? Collaborative advantage “. Relationship Marketing.

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customer relationship marketing
Customer Relationship Marketing
  • Why do some companies succeed?
  • Collaborative advantage
relationship marketing
Relationship Marketing
  • “All activities directed toward establishing, developing, and maintaining successful changes with customers and other constituents.”
  • Why?
relationship marketing2
Relationship Marketing
  • Transactional exchange
    • Definition
    • Distant exchanges
    • One of many suppliers
    • Few operational linkages
      • What’s an operational linkage?
relationship marketing3
Relationship Marketing
  • Collaborative exchange
    • Definition
    • Work closely together
  • Value-adding exchanges
    • Attracting customers Maintaining customers
relationship marketing4
Relationship Marketing
  • Nature of relationships
    • Transactional
      • Standardized
      • Competitive bidding
    • Collaborative exchange
      • Customized product
      • Work together through linkages
      • Relationship commitment
      • Trust
        • Reliability and integrity
relationship marketing6
Relationship Marketing
  • Strategy Guidelines
    • Match purchasing situations and supply chain conditions for each customer!
    • Collaborative
      • How to handle?
    • Transactional
      • How to handle?
measuring customer profitability
Measuring Customer Profitability
  • Common mistake
    • Two factors must be present for differentiation to work
  • Activity Based Costing
    • Aggregate v. Individual firms
  • Unlocking Customer Profitability
    • 20/80 rule
    • Corollary
    • Big companies are usually most profitable or least profitable
measuring customer profitability1
Measuring Customer Profitability
  • Managing High- and Low-Cost-to-Serve Customers
    • What makes some customers expensive?
    • Look inside first
    • Sharper profit lens
      • See next slide
measuring customer profitability3
Measuring Customer Profitability
  • Identifying Profitable Customers
    • Location on chart
    • How to maintain?
  • Identifying Unprofitable Customers
    • Location on chart
    • How to improve the situation?
    • Fire customers?!
      • Why?
      • How?
customer relationship management
Customer Relationship Management
  • “Cross-functional process for achieving
    • continuing dialogue with customers
    • across all their contact and access points, with
    • personalized treatment of the most valuable customers
    • to ensure customer retention and the effectiveness of marketing initiatives”
customer relationship management1
Customer Relationship Management
  • Develop Customer Strategy, THEN choose software
  • Five Steps for Customer Strategy
    • Acquiring the right customers
    • Crafting the right value proposition
    • Instituting best processes
    • Motivating employees
    • Learning to retain customers
customer relationship management2
Customer Relationship Management
  • Acquiring the Right Customers
    • Look at current and potential customers
    • Balance desired level of relationship with profitability of doing so
    • Choosing accounts
      • Three factors
      • How do they define value?
      • Look at profit potential
customer relationship management3
Customer Relationship Management
  • Crafting the Right Value Proposition
    • Value proposition- “the products, services, ideas, and solutions that a business marketer offers to advance the performance goals of the customer organization.”
    • Look at industry- what are others doing?
customer relationship management5
Customer Relationship Management
  • Industry bandwidth
    • The strategies competing firms in an industry pursue
  • Flaring out by unbundling
  • Flaring out with augmentation
  • Create Flexible Service Offering
customer relationship management6
Customer Relationship Management
  • Instituting the Best Practices
    • Salespeople
    • Others
  • Motivating Employees
    • Why?
    • How?
  • Retaining Customers
    • Why?
    • Growth from existing customers
    • Evaluate relationships
gaining an advantage at crm
Gaining an Advantage at CRM
  • Customer-Relating Capability
    • Orientation toward relationships
      • Customer retention is a shard goal
      • Organizational members act quickly on info received from customers
      • All employees understand and appreciate the lifetime value of a customer
      • Employees have considerable latitude when taking actions
    • Information about relationships
    • Configuration
      • Org. structure and performance measures