Chapter 5 - CRM, Big Data, and Marketing Analytics Flashcards
Customer Relationship Management
A comprehensive business model for increasing revenues and profits by focusing on customers.
3 CRM Major Objectives
1) Customer acquisition—acquiring the right customers based on known or learned characteristics that will drive growth and increase margins.
2) Customer retention—retention of satisfied and loyal profitable customers and channels, and thus growing the business profitably over the long run.
3) Customer profitability—increased individual customer margins while offering the right products at the right time.
Customer Satisfaction
The level of liking an individual harbours for an offering—that is, to what level is the offering meeting or exceeding the customer’s expectations?
Customer Loyalty
the degree to which an individual will resist switching or defecting from one offering to another.
customer lifetime value (CLV)
an important metric in CRM that demonstrates that successful long-term relationships with customers pay handsomely in terms of cost savings, revenue growth, profits, referrals, and other important business success factors.
Return on Customer Investment (ROCI)
A calculation that estimates the projected financial returns from a customer. It is a useful strategic tool for deciding which customers deserve what levels of investment of various resources.
Firing a customer
The shifting of investment of resources from a less attractive customer to more profitable ones.
Customer Touchpoints
Where the selling firm touches the customer in some way, thus allowing for information about him or her to be collected.
Data warehouse
a compilation of customer data generated through touchpoints that can be transformed into useful information for marketing management decision making and marketing planning
Data mining
a sophisticated analytical approach to using the massive amounts of data accumulated through a firm’s CRM system to develop segments and microsegments of customers for purposes of either market research or development of market segmentation strategies
Database marketing
Direct marketing involving the utilization of the data generated through CRM practices to create lists of customer prospects who are then contacted individually by various means of marketing communication.
Organizational Learning
The analysis and refinement phase of the CRM process that is based on customer response to the firm’s implementation strategies and programs.
formalization
The formal establishment of a firm’s structure, processes and tools, and managerial knowledge and commitment to support its culture.
Customer Mind-Set
An individual’s belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job.
Big Data
the ever-increasing quantity and complexity of data that is continuously being produced by various technological sources
Structured Data
data that is generated in such a way that a logical organization is imposed on it during its generation, this enabling it to be more readily analyzable for knowledge creation
Unstructured Data
data that is generated in such a way that a logical organization is imposed on it during its generation, this enabling it to be more readily analyzable for knowledge creation
Semi-Structured Data
data that contains some elements of structure that makes it easier for machines to understand its organization, but still contains parts that do not possess an appropriate level of structure to make them readily analyzable by automated means for knowledge creation
Marketing Analytics
a set of methods facilitated by technology that utilize individual-level and market-level data to identify and communicate meaningful patterns within the data for the purpose of improving marketing-related decisions
Marketing Analyst
an individual familiar with different forms of market and customer data and who is trained to conduct different market analyses, as well as the computational costs associated with those analyses
Descriptive Analytics
an approach that utilizes data to provide summary insights
Diagnostic Analytics
an approach that utilizes data to explore the relationship between different marketing-relevant factors that influence the organization’s performance either directly or indirectly
Prescriptive analysis
an approach that involves determining the optimal level of marketing-relevant factors for a specific context by considering how adjusting their levels in varying ways will impact different marketing outcomes
Predictive analytics
an approach that utilizes data to make predictions about future marketing outcomes of interest
Sentiment analysis
a type of analytic method that identifies the general attitude (e.x. positive, negative, or neutral) contained within a message through an analysis of its content
attribution
a type of analytic method that identifies the general attitude (e.x. positive, negative, or neutral) contained within a message through an analysis of its content
content filtering
an analytical method that identifies which products or services to recommend based on a determination of how similar a product or service seems to be to those that the customer has demonstrated a preference for in the past, or is currently considering
Collaborative filtering
an analytic method that predicts a customer’s preferences for products or services based on the observed preferences if customers who are perceived to be similar
Marketing Dashboard
A comprehensive system of metrics and information uniquely relevant to the role of the marketing manager in a particular organization. Dashboards provide managers with up-to-the-minute information necessary to run their operation.
Return on Marketing Investment (ROCI)
What impact an investment in marketing has on a firm’s success, especially financially.
4 elements of the CRM process cycle
1) Knowledge discovery
2) Marketing planning
3) Customer Interaction
4) Analysis and refinement
To maximize a firms ability to successfully use touchpoints
- identify all potential touchpoints
- develop specific objectives for what kind of information can be collected at each touchpoint
- determine how that information will be collected and ultimately integrated into the firm’s overall customer database
- develop policies on how the information will be accessed and used.
At the strategic marketing level, a customer-centric culture includes, but is not limited to, the following major components
- adopting a relationship or partnership business model overall, with mutually shared rewards and risk management
- Redefining the selling role within the firm to focus on customer business consultation and solutions
- increasing formalization of customer analysis processes
- taking a proactive leadership role in educating customers about value chain opportunities available by developing a business relationship
- focusing on continuous improvement principles stressing customer satisfaction and loyalty
4 V’s of Big Data
- volume: the amount of data produced
- velocity: the frequency at which data is generated over time and the speed at which it can and should be analyzed and used
- variety: the different types of data including text, video, images, and audio
- veracity: the reliability and validity of the data
6 Big Data sources
- business systems
- social media platforms
- internet-connected devices
- mobile apps
- commercial entities
- government entities
4 key types of marketing analytics
- descriptive analytics
- diagnostic analytics
- predictive analytics
- prescriptive analytics
Key benefits of a marketing dashboard approach
- aligns marketing objectives, financial objectives, and firm strategy based on the selected dashboard metrics
- enhances alignment within the marketing function and also clarifies marketing’s relationships with other organizational functions. Cross-functional alignment contributes greatly to a shared spirit for organizational success
- portrays data in a user-friendly manner. Creates a direct, understandable link between marketing initiatives and financial results
- fosters a learning organization that values fact-based, logical decision making about allocation of marketing resources to achieve desired organizational results
- create organizational transparency about marketing’s goals, operations, and performance, increasing marketing’s credibility and trust by organizational leadership and other areas of the firm
two primary goals of any dashboard
diagnostic insight
predictive foresight
Key elements of a great marketing dashboard
- company goals translated into a set of marketing objectives
- measurement of financial impact of marketing programs
- tracking of how marketing assets such as the brand and customer relationships are progressing
- execution of skills and competencies of the marketing team
- execution of other business processes necessary to deliver customer value
- continuous refinement of tools to increase access to and usability of customer insights
- insight on not only what is happening in the market but also why it is happening
- a diagnostic for prediction, forecasting, and of course remediation
- ultimately, enhances return on marketing investment (ROMI)
Pitfalls of marketing metrics
- Overreliance on “inside-out” measurement
- too many tactical metrics; not enough strategic insight
- forgetting to market the dashboard internally
4 basic elements of investment decision in marketing
- level of investment
- returns
- risks
- hurdle rates
Which of the following are sources of Big Data? Select all that apply.
- social media platforms
- mobile apps
- internet connected devices
- business systems
The collection of customer information through _____ systems in retail locations is commonly used to determine a customer’s relative value.
point of sales (POS)
Data generated through _____ is very diverse and can include profile data as well as posts and emotional reactions to posts.
social media platforms
As more smart devices enter the market, and increasing source of structured and unstructured data is being transmitted to companies via _______-_______ devices.
internet-connected
Data from _____ _____ is frequently used to help customers find in store details when shopping.
mobile apps
Some commercial entities collect big _______ on customers in order to sell ti to other companies as their primary business model.
data
Census data and labor statistics are examples of data collected by:
government agencies
________ analysis is a type of analytic method that identifies the general attitude contained with a message by an analysis of its content.
sentiment
A goal-driven investment approach to marketing that maximizes the opportunity for a firm’s offerings to reach their full potential in the marketplace is called:
return on marketing investment
Which of the following are commonly expressed objectives about an over reliance on ROMI? Select all that apply.
- pursuit of ROMI during flat periods can be viewed as “causing” underperformance and suboptimal levels of activity
- ROMI requires the profit to be divided by expenditure, yet other performance measures consider profit or cash flow after deducting expenditures
- typically marketing expenditures are not treated as an investment in a company’s accounting system
_______ is the determination of how to give appropriate credit to different elements of the marketing mix through the measurement of their effects.
attribution
Recommendation systems, such as content filtering and collaborative filtering, are examples of _____ using marketing analytics.
personalization
An analytic method that identifies which products or services to recommend based on a determination of how similar they are to those that the customer has preferred in the past is ______.
content filtering
content filtering
Predicting a customer’s preference for products or services based on the observed preferences of customers who are perceived to be similar is called:
Collaborative filtering
Place the elements of the CRM process cycle in the correct order.
- Knowledge discovery
- Marketing planning
- Customer interaction
- Analysis and refinement
Customer _______ are occurrences in which the selling firm touches the customer in some way and allows for information about him or her to be collected.
Touchpoints
Which of the following establishes the best environment for handling all the customer data generated through the touchpoint and transforming those data into useful information for marketing management decision making and planning?
data warehousing
________ ________ is a sophisticated analytical approach to using the massive amounts of data accumulated through the CRM to develop segments of customers for purposes of either market research or development of marketing segmentation and target marketing strategies.
data mining
_____ marketing involves utilizing the data generated from data mining to contact individuals by various means of marketing communication.
database
_____ _____ represents a key use of the output from the knowledge discovery phase.
marketing planning
Which phase of the CRM process represents the actual implementation of customer strategies and programs?
customer interaction
Which phase of the CRM process represents the actual implementation of customer strategies and programs?
customer interaction
In the ______ phase of CRM, organizational learning occurs based on customer response to implemented strategies and programs.
analysis and refinement
What is the phase of the CRM process that uses the output from the knowledge discovery phase?
marketing planning
Interactive touchpoint might include which of the following situations?
- A salesperson sells you an upgrade to fix a problem with your cell phone
- a telemarketer offers you information on a special deal for existing cable customers.
- A customer service representative helps you follow up on a gift delivery
QZB Company experienced a data breach during the holiday gift-giving season. What role can the marketing manager play to help rebuild customer trust?
Proactively communicate the relevant elements of the company’s security strategy to ensure that a breach will not occur again
A firm that is ______-_______ places the customer at the core of the enterprise including everything that happens, both inside and outside the firm.
customer centric
When structure, processes and tools, and managerial knowledge and commitment are formally established in support of the culture it is called:
formalization
A person’s belief that understanding and satisfying customers, whether internal or external to the organization, is central to the proper execution of his or her job is called:
a customer mind-set
Which of the following are benefits of a marketing dashboard? Select all that apply.
- establishment of direct links between marketing spending and profits
- facilitation of smoother decision making
- enhancement of marketing’s ability to contribute
Two primary goals of any marketing dashboard are _____ insight and _____ foresight.
diagnostic; predictive
Which of the following are elements of great marketing dashboards? Select all that apply.
- efficiency and effectiveness
- predictive value
- diagnostic insight
- tools
- process
- skills
- goals and objectives
- initiative ROI and resource allocation
- brand and customer asset evolution
A(n) _______ ________ is a comprehensive system providing managers with up-to-the-minute information necessary to run their operation.
marketing dashboard
A comprehensive business model for increasing revenues and profits by focusing on customers is called:
customer management relationship
_____ analytics utilizes data to provide summary insights.
descriptive
________ _______ means the level of liking an individual harbors for an offering.
customer satisfaction
_________ _______ refers to the degree to which an individual will resist switching, or defecting, from one offering to another.
customer loyalty
The dollar value of a customer relationship based on the present value of the projected future cash flows from the customer relationship is called:
customer lifetime value
Return on _____ _____ is an estimate of the projected financial returns from a customer over the long run.
customer investment
