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Chapter Eighteen
Customer Relationship
Management and
Marketing Research
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-1
Learning Objectives
 Understand the essential elements that
comprise a customer relationship
management (CRM) program.
 Describe the relationship that exists
between marketing research and
customer relationship management.
 Understand the meaning of customer
relationship management.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-2
Learning Objectives
 Describe how organisations use
customer information in a customer
relationship management
environment.
 Understand the role of technology in a
customer relationship management
program.
 Illustrate the process of data
collection for a customer relationship
management program.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-3
Introduction
 Customer relationship management
(CRM) and marketing research are
linked in the relationship management
process.
 CRM is the management of customer
relationships based on the integration
of customer information throughout the
business in order to achieve maximum
cash flow.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-4
Customer Interaction and
Customer Knowledge
 Customer interaction refers to the
relationship between the business
enterprise and the customer.
 Customer knowledge refers to the
information which can be framed into
‘profiles’—which can be utilised to
segment customers, tailor
interactions and build robust
customer relationships.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-5
CRM
The management of customer
relationships based on the
integration of customer
information throughout the
business in order to achieve
maximum cash flow.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-6
CRM and Virgin Mobile
Virgin used CRM to deliver
personalised customer service.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-7
Reasons for CRM
‘As few as 10% of your
customers contribute 90% to
the company’s profits. The only
problem is finding out who they
are!’
David Ogilvy
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-8
Reasons for CRM
Efforts to encourage customer complaints and
manage customer dissatisfaction
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-9
Essentials of CRM
Relies on customer interaction.
Used to create customer
profiles, segment the market,
and build stronger
relationships.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-10
The Customer Relationship
Management Process
Flow model of the customer relationship
management process
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-11
The Role of Marketing Research
in CRM


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What is the value of the customer
segment?
What kind of relationship will add
value to the firm’s customers
(loyalty programs, preferred
customer status, etc.)?
What relationship content will add
value to the customer segment?
What are customers’ responses to
promotions?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-12
The Defining Qualities of CRM
Need to transform a company into
an information-utilisation company
that integrates customer interaction
information for the purpose of:
 being strategically connected
 responsive and
 proactive to its customers.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-13
Strategic Use of Customer
Information
 Two key questions drive a
CRM program; namely:
 What does my customer value?
 What is the value of my
customer?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-14
Information Based on a
Transactional Focus
 CRM moves out beyond the here and
now of real-time transactions with
customers.
 CRM attempts to determine what a
customer really desires, not just what
they happen to buy when a desired
item is not available.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-15
Enterprise-Wide Approach to
the Use of Information
CRM views information as
something to be disseminated
across every internal department
within the business enterprise
and with other facets of the
supply chain.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-16
Technology Support of the
CRM Structure
 Technology provides the platform
for turning customer data into
customer information.
 CRM and technology work together:
 to more precisely target market
segments;
 to integrate and store information in a
centralised database called a data
warehouse.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-17
CRM and technology work
together:
 to mine data for maximum
profitability;
 to determine the economics of
customer acquisition, retention
and lifetime value.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-18
CRM Management Applications
Customer relationship managment applications
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-19
Data Collection in a CRM
Environment
 Passive Data
 Active Data
 Directed Data
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
18-20