Chapter 9: Customer Relationship Marketing Flashcards
Define Customer Relationship
Goal: Maximize the value that is attributed to that customer relationship. Customer Relationships finds ways to sell better, earn profit, and finding ways to interact.
Define Customer Relationship Management (CRM)
Interaction with your customers over a long term period, and not just tracking transactions over a short term period
- More about the relationship you build with customers
Define Customer Relationship Marketing
Acquiring the hardware and software to create a database or system to gather and track customer information
Define the Customer Relationship Management Cycle
Relationship building tool (3 stages). The cycle must be complete to implement measures of customer satisfaction.
Define Stage 1 of the CRM Cycle
Requires that companies understand what they have to offer to their customers and the marketing and market research tools that can help them use the 4 P’s.
- Based off market research
- Creation of the offering
- Collecting as much info as possible
- Research through the 4 P’s
- The development of the most effective marketing mix
Define Stage 2 of the CRM Cycle
Focuses on the use of technology to systemically identify customers, gather information on them, and store that information
- Technology tools can now be unleashed to seek out more detailed information on the customer
Define Data Mining
An analytical process that compiles actionable data on the purchase habits of a companies current and potential customers
- Used to find hidden patterns and relationships in the customer data stored in warehouse
Define Customer-Centric
Customize products and services based on the data gathered through information
- Focusing on what satisfies
The Importance of Interaction
The interaction between customers and the organization is the foundation on which a CRM System is built.
- Can learn about the expectations of their customers
- Generate and manage knowledge
- Find out information about customers (their old past)
- Try and understand preferences, etc.
Define Touch Points
All possible areas of a business where customers have contact with that business and data that might be gathered. Data gathered at these touch points provide information that affects points inside the company (extended warranty purchasers, cost control models, etc.)
Define Capture Customer Data
The issue is not how much data to collect, but rather what data to collect and how to use it effectively for relationship management
- Store visits, website visits, phone conversations, etc.
Define Data Warehouse
A central repository of data collected by an organization. The core of the data warehouse is the data base; the collection of data built through response and compiled lists
Define Identifying the Best Customers
To be successful, companies need to use CRM to identify those customers that are valued customers (most profitable), high potential, etc.
Define Customer Segmentation
Is the process of breaking large groups of customers into smaller groups. This type of analysis generates a profile, or picture, of the customers’ similar demographic, geographic; its focus particularly on the best customers
- The ability to reasonable predict future customer behaviour gives marketers a significant competitive advantage
Define Stage 3 of the CRM Cycle
Requires that companies look at ways to use the information about customers to retain them in the long term by satisfying their needs.
- Maintaining long term relationships with customers
How can CRM Fail
A CRM System must have the ability to move beyond just finding those loyal customers. Companies must leverage the information to build two-sided relationships
- Focusing too much on transactions and not on other aspects of the customer’s life
- Relationships cannot be solely about achieving loyalty, and companies need to find ways to retain their customers
Define Leveraging Customer Identification
Data mining identifies the most profitable customers and prospects. Managers can then design tailored marketing strategies to best appeal to the identified segments
- Leverage the customer information to facilitate enhanced relationships with customers
- Design Tailored Marketing Strategies best appeal to the identified Segment
Define Campaign Management
Refers to developing product or service offers customized for the appropriate customer segment and then pricing and communicating these offerings to enhance customer relationships
Define Retaining Loyal Customers
Building long-term relationships that are mutually beneficial
- After a company has identified its best customers, it should make every effort to maintain and increase their loyalty
Define Cross Selling other Products and Services
Use the database to math product profiles with customer profiles to cross-sell
- Online companies use product and customer profiling to reveal cross-selling opportunities while a customer is surfing their site
Define Targeted Communications
Customers can also be segmented into frequent users, moderate users, and heavy users. A segmented communications strategy can then be developed depending on the customer’s segment
Define Reinforcing
By thanking customers for their purchases and telling customers they are important, marketers can help cement a long-term, profitable relationship (reassurance)
Define a Marketing Database
Can be used to identify new customers. Because a company using a marketing database already has a profile of its best customers, it can easily use the results of modelling to profile potential customers
