Ch. 14 - Customer Relationship Management Flashcards
Customer Relationship Management (CRM)
- Building profitable long-term relationships with customers by delivering superior customer value and satisfaction
- Carefully managing detailed information about individual customers and all customer “touch points”
How can companies ensure high customer satisfaction is achieved?
- Internal records (e.g. purchase behaviour)
- Social Listening
Customer Perceived Value
Difference between the prospective customer’s evaluation of all the benefits and costs and the perceived alternatives
Customer Lifetime Value
The value of the entire stream of purchases a customer makes over a lifetime of patronage
Share of Wallet
The percentage of a customer’s purchases that a company has in a specific product category
Loyalty
A deeply held commitment to rebuy or repatronize a preferred product or service in the future
Why do companies prefer to retain customers over attracting new customers
Existing customers are less price sensitive, less inclined to switch, and they initiate WOM and referrals. Furthermore, it costs 5 times more to get new customers than keeping existing customers
How can companies build trusted relationships with their customers?
Companies must maximize the customer’s experience
Customer Experience Management (CEM)
Managing customer touchpoints with the brand and engaging customers through:
- social media
- brand communities
- loyalty programs
Brand Communities
A place where people who have an emotional connection to your brand can connect with each other and with your brand
Loyalty Programs
Programs designed to retain customers (prevent them from switching). They reward consumers, incentivize them to continue purchasing, and provide data for firms (loyalty programs often require the customer to give their contact information to sign up)
