exam 1 Flashcards
In which two general ways can companies compete, and how does CRM help enable both?
Companies compete in how they are run and what they sell. CRM enables both because it influences how they are run (customer focused) and what they sell (customer segmented?)
Identify and define the four primary uses of CRM by a company’s management.
Strategic: Aims at winning and maintaining profitable customers
Operational: What a customer faces/how you run the business
Analytical: Focuses on intelligent mining of customer related data for strategic purposes
Collaborative: Applies technology across organizational boundaries with a view to optimizing customer, company, partner value.
What are the three types of operational CRM?
- Sales
- Marketing
- Service
Define a “relationship” in CRM terms; how does it relate to the customer experience?
Relationships are series of interactive episodes between parties over time. Episodes are series of interactions.
Define in practical terms a sales funnel or sales pipeline. What insights does it provide a company’s management?
Prospects Inquiries Proposals/Sales New customers REPEAT
Funnel of the customer journey that sales and marketing departments use to track customers & prospects.
Define the traditional three-step purchase process. What fourth step has been added? How does this new step relate to the trend of relying on “someone like me” as we purchase goods and services?
Traditional: Stimulus First moment of truth (Shelf) Second moment of truth (experience)
New: Stimulus ZMOT (research) First moment of truth Second moment
Aggregator business model
Developing and providing tools for the customer to invent his/her own experience
Ex) Nike ID, coke machines, smart phone
What are the non-customer parties in the S.C.O.P.E. of CRM? How are they related to the overall goals of CRM?
SCOPE: Suppliers, Partners, Employees, Owners
Recall what we decided Tata’s primary source of competitive advantage is (at least from my eyes…) and relate it to the importance of managing non-customer relationships.
Tata’s main competitive advantage is that they have great relationships with their employees and the community. Tata gives great benefits to its employees, and provides funding for schools and hospitals in the community. This is important because they create advocates within the company and the community.
Explain how the flagship model relates to both sustainable competitive advantage and to the importance of managing non-customer relationships. 2 | P a g e 17. Relate the flagship model to Tata and to AMD.
The flagship model is the way companies manage relationships with competitors, suppliers, network partners, gov, and customers. You don’t need the best products to form relationships.
Define “customer lifetime value” and, in general terms, how it is calculated. What kind of segmentation does CLV enable for companies, and toward what end?
CLV is the amount of value a company receives from a customer over their lifetime. You calculate CLV by finding info into future buying behavior, margins earned from those products, periodic costs of customer mgmt, the retention rate (how long will be a customer), the costs of a customer acquisition, and the discount rate (interest rate used to bring back future costs to now). Then profit of the customer is revenue gained – expenses. You segment customers based on how they should be treated (based on value)
Explain how a company’s most profitable 20% of customers can possibly generate 200% of its profits. Relate this to the concept and goals of one kind of segmentation.
This is called the Pareto rule or the 80:20 rule. This is where 20% of your customers make up most of your profit. It’s with segmentation that you need to successfully identify this 20% and make sure that they still faithful to your store but shopping often and buying a lot.
What are “tangible” and “intangible” values? Give examples of both. Why should a marketing manager consider both as he or she recommends a price for a product or service
A tangible value is the form the product or the task being done by the service. The intangible value is hidden, basically asks how happy the purchase makes someone. Because the intangible value may not always coincide with what the customer wants or needs
What are two ways to measure customer loyalty, and which measurement is more closely linked to profitability? Why?
Behavioral loyalty and attitudinal loyalty. Attitudinal, because with behavior it could be linked to you only because you are the more convenient option but with attitudinal people go out of their way to shop and say good things about your company
What two main categories of customer variables are analyzed in formal customer segmentation studies? Think about the retail grocery store example we did in class; there were two lists of variables collected and analyzed. What are each used for?
A customer needs and descriptors(demographices) are analyzed. Each are used to figure out how to market so that their needs are met and how a particular demographic needs to be marketed differently than another demographic
