CH 1 - Customer Relationship Management A Databased...

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Customer Relationship Management A Databased Approach V. Kumar Werner J. Reinartz Instructor’s Presentation Slides
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Chapter One CRM, Database Marketing and Customer Value
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Overview Topics discussed: Marketing concept Link between CRM and Database Marketing CRM and Customer value Conceptualizations of CRM Relevance of CRM Data based Customer Value Management
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Marketing-definition “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” American Marketing Association,2004
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Link Between CRM and Database Marketing Database Marketing Customer Databases Identify and analyze customer population Group based on similarities Recommend separate marketing campaigns for different groups CRM Applies database marketing techniques at customer level Develops strong company-to-customer relationships
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CRM Capture customer data and interact with the customer simultaneously Develop specific strategies for interaction with each customer Better relationships with profitable customers Locating and enticing new customers that will be profitable Finding appropriate strategies to deal with unprofitable customers, including termination of relationships
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Link Between CRM and Customer Value Customer Value: The economic value of the customer relationship to the firm – expressed on the basis of contribution margin or net profit CRM is the practice of analyzing and utilizing marketing databases and leveraging communication technologies to determine corporate practices and methods that will maximize the lifetime value of each individual customer to the firm
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Using Customer Value for Marketing Decisions Benefits Decrease in Costs Maximization of Revenues Improvement in Profits and ROI Acquisition and Retention of Profitable Customers Reactivation of Dormant Customers
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Conceptualizations of CRM Functional level: focuses on technology Sales force automation in the sales function Campaign management in the marketing function Customer facing front-end level: focuses on total customer experience To build a single-view of customers across contact channels To distribute customer intelligence to all customer-facing functions
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