ch 8

(customer relationship management): a system that gathers information about customers that can help to build customer loyalty and retain those loyal customers

- Customer relationship marketing (CRM) and customer relationship management (CRM) are often combined, but they differ in their focus on acquiring hardware and software for database creation.
- CRM focuses on understanding customer needs, keeping them updated, and satisfying them over time. While CRM heavily relies on technology, it requires management and assessment to ensure long-term satisfaction.

Action
Response
Measurement
Collection
FocuS

Action-Does things to people
Response-Concerned with achieving a response to stimulus
Measurement-"Do you like what we are sending?"
Collection-Data - addresses, purchases
FocuS-Buyer-seller

Action-Does things with people
Response-Concerned about the "how" and "why" of a response
Measurement- "Tell me why what we sent was useful."
Collection- Data plus intention
FocuS- Supplier-customer

market research

business development

customer feedback

The initial stage of creating a comprehensive customer relationship management (CM) system involves using tools and techniques to create a holistic offering that reflects customer needs, utilizing IT methods effectively.

graphs in textbook!

s a data analysis method that identifies hidden patterns in customer data, ranging from small data sets to millions of customers, using sophisticated data warehouses to analyze their shopping patterns.

breaks large customer groups into smaller, homogeneous groups, focusing on the best customers based on demographic, geographic, and psychographic traits. This analysis allows comparisons with other customer segments, like usage frequency and credit.

a data manipulation technique in which marketers try to determine, based on some past set of occurrences, the odds that some other occurrence, such as an inquiry or a purchase, will take place in the future

recency-frequency-monetary (RFM) analysis: the analysis of customer activity by recency, frequency, and monetary value

lifetime value (LTV) analysis: a data manipulation technique that projects the future value of the customer over a period of years by using the assumption that marketing to repeat customers is more profitable than marketing to first time buyers

Companies utilize data warehousing to store and integrate valuable customer information, ensuring consistency, accuracy, and accessibility. This central repository enables marketing managers to quickly access vast amounts for decision-making.

- response list: a customer list that includes the names and addresses of individuals who have responded to an offer of some kind, such as by website, email, mail, telephone, direct-response television, product rebates, contests or sweepstakes, or billing inserts

-compiled lists: customer lists that are developed by gathering names and addresses gleaned from telephone directories and membership rosters, sometimes enhanced with information from public records, such as census data, auto registrations, birth announcements, business start-ups, or bankruptcies

Current transaction
Past relationships
Channel
Request service

-touch points:all possible areas of a business where customers have contact with that business

-point-of-sale interactions: communications between customers and organizations that occur at the point of sale, usually in a store

Companies with a customer-centric management system customize their products and services based on customer interactions, a philosophy that transcends all functional areas of the business, ensuring all decisions and actions are directly recut from customer information.


- Customer- centric: a under which the customers its product and service offerings based on data generated through interactions between the customer and the company

- Learning (CRM): in a CRM environment the informal process of collecting customer data through customer comments and feedback on product or service performance

- knowledge management: the process by which I cared information from customers is centralized and shared for the purpose of enhancing the relations his between customers and the organization

- empowerment: delegation of authority to solve customers' problems quickly usually have the first person who learns of the customer's problem

- Interaction: the point at which a customer and a company representative exchange information and develop learning relationship

CRM systems prioritize data acquisition from customer interactions, focusing on channel interactions rather than traditional methods like store visits and sales conversations.

-Companies can collect vast amounts of customer data, including contact information, purchase history, spending habits, and promotional sensitivity, through interactions with customers.

-Point-of-sale interactions enable customers to provide information about themselves.

- Campaign management
- Retaining loyal customers
- Cross-selling other products or services
- Designing targeted marketing communications
- Reinforcing customer purchase decisions
- Inducing product trials by new customers
- Increasing effectiveness of distribution channel marketing
- Improving customer service

privacy: Before investing in a customer relationship management (CM) system, marketers should consider consumer reactions to databases. Privacy concerns arise due to the vast amount of information in databases. While CM databases offer valuable services, trust is crucial for building relationships. If customers feel their privacy is being violated, the relationship becomes a liability.

future:
on-demand marketing: delivering relevant experiences, integrated across both physical and virtual environments, throughout the consumer's decision and buying process

1. CRM programs focus too much on transactions and not on other aspects of the customer's life.
2. Relationships cannot be solely about achieving loyalty, and companies need to find multiple ways to retain their customers.
3. A relationship is dynamic and two-sided. It is not enough to get a list of customers and their spending habits; the relationship will evolve with each transaction, and CM systems must as well.