Chapter 8 Review:
The customer relationship relies on the concept of customer lifetime value (CLV) to demonstrate the profit impact of relationship strategies.
• It emphasizes the importance of caring for customers in a way that causes them to return and to concentrate more of their purchases with the marketer.
• Loyal Web customer also expressed willingness to buy other product lines from the online retailer.
Without the Internet, it was difficult to make and keep up with relationships with customers.
• They could not identify their customers as individuals and attempt to develop an ongoing relationship with them.
• The customer relationship, if there was one, was owned by an intermediary in a channel of distribution.
Difference between B2B and B2C:
• This is the idea that in the traditional (transactional) model, the relationship with the customer was in the hands of the intermediaries (retailers).
• In B2B, the relationship with the customers (other businesses) was in the hands of the company’s sales force (sales reps). They held all of the information about the customers and often didn’t provide detailed enough data to centralized management.
• B2B—if customers made purchases from different product lines, there would be different and confusing customer contact points. Different departments handled different product line and transactions.
• Positive for B2B: Reps who recognized the difference could, on an individual basis, allocate their time and effort according to the value of the customer relationship.
Difference between transactional and relationship model:
• Transaction: the emphasis was placed on generating high economic exchanges—market share.
• In relationship model: customer needs and the expertise needed to meet them become key. Goal: growing customer value, not market share.
• CLV: incorporates both revenue and cost to serve the customer. Other key analysis are customer satisfaction, loyalty, and employee satisfaction.
Don Peppers and Martha Rofers CRM Model:
• Identify your customer—individual or household, address/email
• Differentiate them according to their needs and their actepual or potential value (segmenting and profiles).
• Customize at least some aspects of the organization’s dealings with the customer.
Field salespeople are given access to a comprehensive customer/prospect database, which is also used for sales and marketing management applications.
CRM: helps bring consumer data to departments other than Marketing.
• Relationship marketing requires significant changes in the way marketing is done.—The emphasis must more from promotional campaigns and marketing research projects to ongoing dialog that is captured and stored in a customer database.
• CRM must be treated and managed as an ongoing process, not as a series of discrete events (such as Market Share).
• Customer-centric approach: target consumers are identified first, and the value proposition, encompassing all aspect of the marketing mix, is then developed.
• Used to develop CLV—predict how customers will respond to different marketing situations.
CRM for the Internet: Consumers can make profiles on their websites that state: name, age, residence, file complaints, take surveys—that’s how website obtain that info.
The 3 Legs of CRM: Marketing, Sales force automation, customer service.
Sales force automation: processes, and the software that supports them, that permit salespeople to work more effectively both in and out of their offices by providing electronic access to important documents and customer data.
The term CRM has been adopted to describe relational marketing in both the B2B and B2C spaces.
Targeting, Personalization, and Customization
• Targeting: directing marketing communications to individuals or businesses that have been identified as valid prospects for acquisition or retention.
• Personalization: creation of specialized content for a prospect with a known profile by choosing from an array of existing content modules.
• Customization: creation of new content, services, products based on the needs and wants of an individual customer.
In Internet Marketing, Personalization is more important than Customization.
Internet marketing: customer—profiling: send them a product offer or come up with a new unique value proposition.
Cookies: the file stores a string of tagged data items that describe user activities.
Decision rule: a statement that takes the form “it…them” specifying an action to be taken, given the occurrence of a particular event.