Topic 1

Question 1

Commoditisation

Answer 1

To commoditise is the act of making a process, goods or services easy to obtain by making it as uniform, plentiful, and affordable as possible

Question 2

Progress of economic value

Answer 2

1. commodities were extracted from the earth and then sold on the open market (agrarian economy).
2. companies using commodities as raw materials to manufacture goods. These goods then started to become commoditised (Industrial Revolution)
3. commoditisation evolved into customisation, which automatically turned it into a service
4. Services started being commoditised, which led to shifting into the experiences economy

Question 3

Relationship marketing

Answer 3

A forced progression from the traditional marketing model, which was based on consumer development.

Question 4

Characteristics of relationship marketing

Answer 4

1. Classified as a ‘networker’
2. Focused on creating long-term relationships with customers
3. Maintained relationships will result in a higher profit-line reading of your financial planning practice.

Question 5

Characteristics of traditional marketing

Answer 5

1. Classified as an ‘event coordinator’
2. Focuses on bringing in more customers

Question 6

Main factors that changed the marketing strategy

Answer 6

1. An increase in businesses offering the same product.
2. An increase in the types of products catering for a single need
3. An increase in consumer awareness/knowledge

Question 7

Relationship marketing strategy

Answer 7

A strategy focusing on building a relationship that benefits both the customer and the business

Cannot be carried out without a CRM system infrastructure

Question 8

Client relationship management (CRM)

Answer 8

The tool that collects and processes data in order to support the relationship marketing strategy

Makes use of the tools that will assist in carrying out the relationship marketing strategy

Question 9

Example of tools CRM use

Answer 9

Computer programs identifying client purchasing patterns, and processes, such as a minimum service level agreement, aligned with client preferences and expectations

Question 10

Main objective of CRM

Answer 10

To use information about clients so as to maximize the lifetime value of a customer to the organization

Question 11

Types of relationship marketing strategy

Answer 11

1. Strategy development process
2. Value-creation process (value proposition)
3. Multi-channel integration process (operational management)
4. Information management process
5. Performance assessment process

Question 12

Strategy development process

Answer 12

Focusing on how it should develop and evolve over time

Decided whether macro-, micro-, or one-to-one segmentation should be applied

Question 13

Strategy development process CRM tool

Answer 13

Examines existing and potential customer bases per the specific market focus

Segments client database according to the segmentation approach selected at strategic level

Question 14

Value-creation process (value proposition)

Answer 14

Focus on value derived by the customer, the recognition of and providing for his needs, and positive customer experience throughout his lifetime with the business

Objective is to maximize the lifetime value of desirable customer segments through using improved acquisition strategies

Question 15

Value-creation process (value proposition) CRM tool

Answer 15

Uses analytical tools to determine the attributes of a product or service that clients most value

Focused on ensuring an even better experience and creating product solutions that are not already catering for your targeted market

Question 16

Multi-channel integration process (operational management)

Answer 16

Desired outcomes are placed into action

Interactions with client are identified and value-added activities that ensure positive customer experiences are put into action

Question 17

Multi-channel integration process (operational management) CRM tool

Answer 17

Identify support channels within your organization that are part of providing the clients with a service and provide feedback received to other roleplayers within your organization

Question 18

Information management process

Answer 18

Information about the client is collected to gain a deeper insight into what your client needs and expects from you

Question 19

Information management process CRM tool

Answer 19

Identifying communication preferences of clients using database information

Use data-warehousing and data-mining techniques

Question 20

Performance assessment process

Answer 20

Focuses on driving performance in relation to the RM strategy through
1. Shareholder results
2. Performance monitoring

Question 21

Performance assessment process CRM tool

Answer 21

1. Identifies employee satisfaction, customer loyalty, and shareholder profitability
2. Identifies cost-reduction opportunities through deployment of newer tech and updated system

Question 22

Objective of relationship marketing within financial planning

Answer 22

Attract and identify clients who have a need for the service or product, maintain and enhance relationships with these clients at a profit so that the objective of all parties involved are met

Question 23

Ways to achieve RM objectives

Answer 23

1. Financial planners can identity ways to create new kinds of value
2. Clients experience value in service or choose to chase their financial planner
3. Client understands his financial plan
4. Financial Planning practice can amend business processes on maintaining a positive relationship with clients

Question 24

Correctly applying RM principles

Answer 24

1. Can identify the most profitable clients so that the business can focus its service levels and strategy on these clients
2. Can evaluate markets that it can focus on where there is still room for additional business

Question 25

Lifetime value

Answer 25

The present value of the future profits expected over the client’s lifetime purchases

Question 26

Result of effective RM approach

Answer 26

A long-term relationship where both the brand and the client have the security of a relationship with each other being established

Question 27

Advantages of RM strategy

Answer 27

1. Provides several competitive advantages
2. Increases the cost of switching to other brands or service
3. Anticipates customer demands
4. Clients experience value in the service offering
5. Loyal clients refer their friends, colleagues, and business partners, which means more potential business opportunities