Business homework

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Front office that integrates sales, marketing, and service functions across all media

A data warehouse that:

Stores customer information and the appropriate analytical tools with which to:

Analyze that data and learn about customer behavior

Successful Implementation

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Business rules developed from the data analysis

Measures of performance that enable customer relationships to continually improve

Integration into the firm’s operational support systems, ensuring the front office’s promises are delivered

Successful Implementation

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Implementing CRM before creating a customer strategy

Putting CRM in place before changing the organization to match

Assuming that more CRM technology is necessarily better

Investing in building relationships with disinterested customers

Causes of Failure

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Customer value

Value received by the organization

CRM and value chain strategy

Value Creation Process

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Defined as:

The value the customer receives

The value the organization receives

Value Creation Process

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Value proposition - Expresses the benefits received by the customer

Explains the relationship among:

The performance of the product

The fulfillment of the customer’s needs

The total cost to the customer over the customer relationship life cycle

Customer Value

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Customer lifetime value (CLV) - A key concept associated with the value received by the organization

Expected profitability of a customer over the time-span of the relationship with the customer

Value Received by the Organization

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Important that CRM be integrated with the different channels that access end-user customers

Many companies interact with customers using multiple channels including:

Salespeople

Value chain partners

Email and Internet

Telephoning

Direct marketing

CRM and Value Chain Strategy

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Implementation

Performance metrics

Short-term versus long-term value

Competitive differentiation

CRM and Strategic Marketing

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Implementation - Critical to view this as more than technology focused on efficiency

Performance metrics

Sales, profitability, and market share

Customer acquisition cost

Conversion rates (from lookers to buyers)

Retention/Churn rates

Same customer sales rates

Loyalty measures

Customer “share of wallet”

CRM and Strategic Marketing

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Short-term versus long-term value

Long-term issues should be considered when:

Decisions are made about a company’s customer priorities using historical customer profitability

Customer lifetime value - An attractive measure to use to examine long-term customer attractiveness

CRM and Strategic Marketing

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Competitive differentiation

Lack of competitive advantage - Requires more than just investment in CRM technology

Particularly if it is poorly implemented

Information-based competitive advantage - The creation of a major new source of knowledge about customers

CRM and Strategic Marketing

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Corporate reputation

Customer value and competitive positioning

Ethics and Social Responsibility in Strategic Marketing

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Increasingly significant to the creation of effective customer relationships

In part because of the impact on corporate reputation

Ethics and Social Responsibility in Strategic Marketing

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Damage to corporate reputation of a business can:

Substantially reduce its ability to compete

Undermine the value of a company

Strength or weakness of an organization’s corporate reputation impacts:

Customer perceptions of how attractive it is to do business with that company

Corporate Reputation

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Ethical imperatives

Defining ethical standards

Business ethics

Marketing ethics

Drivers of ethical demands

Green and ethical consumer

Ethical consumerism

Corporate Reputation

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Proactive responses by firms - Trends that are indicative of the relevance of ethics and CSR in firms

Establishment of ethics executives

Codes of ethics and internal procedures to provide a framework for ethics actions

Corporate Reputation

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Organizational involvement - Includes:

Favorable organization culture

Assignment of responsibility

Ethics codes

Operating processes/guidelines

Action

Monitoring and control

Corporate social responsibility initiatives

Spans economic, legal, ethical, and philanthropic concerns by an organization and its stakeholders

Corporate Reputation

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Defining CSR - Understood to encompass company activities that

Integrate social and environmental concerns into business operations

Into the company’s interaction with other stakeholders, on a voluntary basis

Drivers of CSR:

Defensive CSR

Strategic CSR

Creating shared value

Corporate Reputation

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Escalating transparency - Underlines the importance of CSR to a company’s competitive position with customers

Customer Value and Competitive Positioning

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