Download Building Customer Relationship

Building
Customer
Relationship
“Service is so great an opportunity for the
company that our vision for the next century
is that GE is a global service company that
also sells high quality product.”
Jack Welch
Relationship Marketing
• Relationship marketing is a philosophy of
doing business, a strategic orientation,
that focuses on keeping and improving
current customer rather than acquiring
new customer.
• There has been a shift from a transaction
to a relationship focus in marketing.
customers become partners and the firm
must make long term commitment to
maintaining those relationship with
quality, service and innovation.
Goals of relationship
marketing
• To build and maintain a base of
committed customers who are
profitable for the organization.
• Customers goals of relationship
marketing :getting customer,
satisfying customers, and enhancing
customers.
• Loyal customers can be even better
customers
Benefits for customers and
firms
• Confidence benefits
• Social benefits- social support benefit
resulting from these relationship are
important to consumer quality of
life.
• Special Treatment Benefits
Benefits for the
Organization
• Increased revenues
• Reduced marketing and
administrative cost.
• Free advertising through word of
mouth
• Employee retention
Factors that influence
relationship Value
• Length of an average life time.
• Average revenue generated
• Sales of additional products and
services over time
• Referral generated by customer over
time.
• Cost associated with serving the
customers
Foundations for relationship
strategies
• Quality in the core service
• Market Segmentation and targeting.
• Continuous monitoring of relationship
Bases for market
segmentation
• Demographic: Age sex family size,
income, occupation, or religion.
• Geographic
• Psychographic: Bases on social class,
lifestyle, or personality
characteristics.
• Behavioral segmentation: based on
knowledge, attitude, uses or
responses to a service
Requirement for effective
segmentation
• Measurability
• Accessibility
• Substantiality
• Action ability
Criteria for evaluating market
segments for market targeting
• Segment size and growth-information on
current rupees sales, projected growth
sales, and expected profit margins.
• Segment structural attractiveness-current
and potential competitors, substitute
products and services, relative power of
buyers and relative power of suppliers.
• Company's objectives and resources:
Involves whether the segment fits the
company objective.
Steps in market segmentation
and targeting for services.
• Identify bases for segmenting the
market
• Develop profiles of resulting
segments
• Develop measures of segment
attractiveness
• Select the target segments
• Ensure that segments are compatible
Monitoring relationship
• Basic market research in the form of
annual customer relationship surveys
for determining their perception on
value received, quality, satisfaction
with services and satisfaction with
the provider relative to competitors.
The 80/20 Customer
pyramid
• 20% of customer produce 80% of sales or
profit.
• 20% of the best customer spends more
with company over time, costs less to
maintain, and spreads positive words of
mouth’.
• 80% of the other customers cost the
company in time, efforts, and money and
yet does not provide the return the want
The expanded customer
pyramid
• The
• The
• The
• The
platinum tier
Gold Tier
Iron Tier.
lead Tier
Levels of relationship
strategy
• Level 1-Financial Bonds-volume and
frequency rewards, bundling and cross
selling, stable pricing
• Level II- Social Bonds-continuous
relationship, personal relationship, social
bond among customers.
• Level III- Customization BondAnticipation/innovation/mass
customization, Customer intimacy
• Structural Bond-Integrated Information
Systems, Joint Investments, shared
process and equipment
CRM
• CRM deals with learning about the
needs and behavior of customer in
order to develop stronger
relationships with them. It involves
the use of technology to enable
organizations to continue attracting
new and profitable customers while
forming tighter bond.
• CRM involves various tools, technologies
and business procedure to attract and
retain customers, prospects and business
partners• Contact Management
• Sales Force Automation
• Opportunity Management
• Relationship Management
• ERP (enterprise relationship management)
is also a tool of CRM
• CRM software is designed to help
companies keep track of their
customers and boost revenues.
• CRM is the process that helps bring
together various pieces of
information about customer, sales,
marketing effectiveness and market
trends.
• CRM helps company provide
• Better customer service
• Make call centre more efficient
• Cross sell product more effectively
• Close deals faster
• Simplify marketing and sales process
• Find new customers and increase
customer revenue
CRM software collect following
information
• Responses to campaign
• Shipping and fulfillment dates
• Sales and purchase data
• Demographic data
• Shipping and fulfillment dates
• Account information
• Service and support records
• Web sales data
CRM helps companies to
• Gain better understanding of customer
needs and build individual customer
solutions.
• Establish a dialog with customers using
internet.
• Improve marketing efforts by using readily
accessible customer information
• link departments, giving them access to
the same information updated in real
time.