{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

CH 6 - Customer Relationship Management A Databased...

Info icon This preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
Customer Relationship Management A Databased Approach V. Kumar Werner J. Reinartz Instructor’s Presentation Slides
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Chapter Six Customer Value Metrics: Concepts and Practices
Image of page 2
Topics Discussed Popular Customer-based Value Metrics Strategic Customer-based Value Metrics Popular Customer Selection Strategies Lift charts Cases
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Customer Based Value Metrics Customer based value metrics Popular Strategic RFM Past Customer Value LTV Metrics Size Of Wallet Transition Matrix Share of Category Reqt. Share of Wallet Customer Equity
Image of page 4
Size-of-Wallet Size-of-wallet ($) of customer in a category = Sj Where: Sj = sales to the focal customer by the firm j j = firm, = summation of value of sales made by all the J firms that sell a category of products to the focal customer Information source: Primary market research Evaluation: Critical measure for customer-centric organizations based on the assumption that a large wallet size indicates more revenues and profits Example: A consumer might spend an average of $400 every month on groceries = J j 1 = J j 1
Image of page 5

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
SCR (%) of firm or brand in category = Vij / Vij j = firm, V = purchase volume, i = those customers who buy brand = summation of volume purchased by all the I customers from a firm j, = summation of volume purchased by all I customers from all j firms Information source : Numerator: volumetric sales of the focal firm - from internal records Denominator: total volumetric purchases of the focal firm’s buyer base- through market and distribution panels, or primary market research (surveys) and extrapolated to the entire buyer base Evaluation: Accepted measure of customer loyalty for FMCG categories, controls for the total volume of segments/individuals category requirements; however, does not indicate if a high SCR customer will generate substantial revenues or profits Share of Category Requirement (SCR) = I i 1 = I i 1 = J j 1 = I i 1 = I i 1 = J j 1
Image of page 6
Computation of SCR Ratio - Example Total requirement of Notebook computers per customer A Total number of Notebook Computers purchased from ABC Computers per customer per period B Share of category requirement for ABC computers per customer per period B/A Customer 1 100 20 .20 Customer 2 1000 200 .20 Customer 3 1000 500 .25 Customer 3 has the highest SCR. Therefore, ABC Computers should identify customer 3 and target more of their marketing efforts (mailers, advertisements etc.) towards customer 3 Also, customer 3’s size-of-wallet (column A), is the largest
Image of page 7

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Share-of-Wallet (SW) Individual Share-of-Wallet Individual Share-of-Wallet of firm to customer (%) = Sj / Sj Where: S = sales to the focal customer, j = firm, = summation of value of sales made by all the J firms that sell a category of products to a buyer Information source: Numerator: From internal records Denominator: From primary market research (surveys), administered to individual customers, often collected for a representative sample and then extrapolated to the entire buyer base Evaluation: Important measure of customer loyalty; however, SW is unable to provide a clear indication of future revenues and profits that can be expected from a customer = J j 1 = J j 1
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern