Brand Loyalty

Brand Loyalty has been used in the Business Context to describe a Customers Willingness to continue patronizing a firm over long term, purchasing and using its goods and services on a repeated and preferably exclusive basis, and recommending the firms products to friends and associates

Customer Equity

Customer equity refers to the total sum of the discounted lifetime values of all the firms current customers The discounted value of each individual customer throughout his or her expected lifetime as a customer of the firm to determine the Customer Lifetime Value (CLV) The sum of CLVs for all customers equates to the firms customer equity

Importance of Customer Loyalty

Profits derived from increased purchases Profits from reduced operating costs Profits from referrals to other customers Profits from price premiums

CUSTOMER RELATIONSHIP MANAGEMENT

Definition: Relationship Marketing is the process of building long term , trusting, win win relationship with the customers, distributors ,dealers and suppliers. Overtime relationship Marketing promises and delivers high quality , efficient service and fair prices to the other party. It is accompanied by strengthening economic, technical and social ties between members of the two organizations or between Marketer and individual customers.

Definition

CRM is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.

Definition

CRM is the core business strategy that integrates internal processes and functions , and external networks to create and deliver value to targeted customers at a profit. It is grounded on high quality customer data and enabled by IT.

Why CRM- Benefits to customers

Recognition Personalisation Power Risk Reduction Status Affiliation

Pre Requisites of CRM

Demographic, Psychographic Profiling of customers Develop flexible manufacturing and marketing system Maintain balance between quality , cost and speed of implementation, to add customer value Market research information system, to track changing trends in consumer behavior Calculate the Life Time Value of customers Customer selectivity: Segmenting the customers and selecting the most profitable ones for individual marketing program.

Key CRM Principles

Differentiate customers Differentiate offerings Maximize life time value Increase Loyalty

CRM Cycle
Customer retention and referrals for new customers Customer need assessment and acquisition

Customer equity:Leverage thru Customer develp thru Personalisation cross selling n and customisation and upselling

Creating value through CRM

Value from products: Product innovation Additional benefits: 5 years warranty etc. Product service bundling. Branding Product synergies.

Creating value through CRM

Value from Services: Service Quality Service Gurantees Service level agreements Service recovery programmes

Creating customer value

Complaints management Interactivity Personalisation Value from physical evidences Value from people

Creating Bonds With Customers

Deepening the relationship Reward Based Bonds Social Bonds Customisation Bonds Structural Bonds

STRATEGIC CRM

The acquisition of carefully targeted customers or market segmentaton The retention and development of strategically significant customers or market segments Contin

Relationship Management Tactics

Maintain proper perspective. Remember customers between calls Build trust: Protect confidential information Refrain from making disparaging remarks about other competitors and customers Tell customers the truth Provide him with full information Be dependable, courteous, and considerate with customers Become actively involved with community affairs Handle every transaction to customers satisfaction

B 2 B CRM

Product or application are complex Product is strategically important There are downstream service requirements Financial risk is high Reciprocity is expected

CRM in B2C Markets

1. 2. 3. 4. 5.

Managing defections: Shift in 70% of the business is defection. Find customers who are leaving Win them back Have early warning signals Listen to customers Let go of non profitable customers

Service recovery

For a good service recovery employees must be willing to put in that extra bit of effort and act quickly to retrieve the customer

Recovery strategies

Cost of effective service recovery Encouraging customer inputs Anticipate needs for recovery Fast and prompt action training and empowering of employees

Unconditional Service Guarantee: Management View

Focuses on customers (British Airways) Sets clear standards (FedEx) Guarantees feedback (Manpower) Promotes an understanding of the service delivery system (Bug Killer) Builds customer loyalty by making expectations explicit

Service Guarantee Features

Unconditional Easy to understand and communicate Meaningful Easy to invoke Easy to collect

Advantages

Focuses on customer Sets clear standards CRM in B2C Markets Guarantees Feedback Promotes an understanding od service delivery system Builds customer loyalty

CRM in B2B Markets

1. 2. 3.

4.

Characteristics of Business Markets: Close interaction with customers Long selling cycles Different sets of decision makers and influencers Business customers demand greater responsiveness, reliability and quality consciousness.

CRM Strategies in B2B Market

Focus on key customers and build long term relationship with them Proactively generate higher levels of customer satisfaction with every interaction with the customers Anticipate customer need thru careful study Build close ties Create a value perception

Key account Management

A key account can be defined as a customer in a B2B market identified by a selling firm as of strategic importance.

KAM
KAM Can be used for Customer segmentation : 1. Following informatin is required 2. Growth in profits as compared to growth in sales 3. Characteristics of a key account 4. Cost of servicing each customer vis a vis his/her contribution 5. Impact of losing a key account on the bottom line of the firm

KAM
KAM Can be used for Customer retention Growth and development

Data Ware House

A data Warehouse is a large resevoir of detailed and summary data that describes the organisation and its activities,organised by various business dimensions in a way that facilitates easy retrieval of information that describes the organisational activities.

Data Warehousing objectives

Keep the warehouse data current Ensure that the warehouse data is accurate Keep the warehouse datd secure Make the warehouse data easily available to the authorised users. Maintain descriptions of the warehouse data so that the users as well as the systems developers can understand the meaning of each element.

Data mining

Data mining involves the retieval of detailed and summary data from the data warehouse, transformation of the data into information and presentation of the information to the users.The information that is mined is used in decision making.

Data Mining

Data Mining performs four functions. It makes classifications , forms clusters, makes association and determines patterns and sequences.