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CRM in Marketing Chapter 2

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Title: CRM in Marketing Chapter 2


1
CRM in MarketingChapter 2
  • Curtis Adams
  • Jordan Burns
  • Lindsey Birmingham
  • Leah Barnhill

2
Motivational Research
  • -1960s Practice
  • -Included everything from showing volunteers a
    series of advertising to administering focus
    groups
  • -Scope of these efforts remained unwavering in
    product focus
  • -However with the customer acting as a component
    of the purchase cycleBRAND WAS KING.

3
Product Marketing
  • -Became a study within itself
  • -Part researchPart guessing gamepart leap of
    faith
  • -Predictable
  • -Product marketing campaigns were designed to
    reach as many as possible
  • -Focused on all customers having the same needs
    and wants and the actual pitch of the product

4
Target Marketing
  • Customer data as important as the product data
  • Sum of all the customers to a single individual
  • Segmenting customers allowed room for specialized
    communication
  • Segmenting customers based on preferences can
    reveal interesting facts about consumer behavior

5
Relationship Marketing
  • -Understanding their preferencesincreasing the
    odds of retaining them
  • -You are not trying to sell a single product to
    as many customers as possible
  • -You are trying to sell a single customer as many
    products as possible
  • -One to One means not only communicating with
    customers as individuals but also developing
    customer products and tailored messages based on
    customers unspoken needs
  • -Relies heavily on customers experience of the
    company as it does on the specific message
    received

6
Campaign Management
  • -CRM is a necessity.
  • -Hard Labor in launching new marketing campaigns
  • -Conceive, plan, define the target audience,
    determine channel of communication, launching the
    promotion
  • -CRM products offering campaign management
    present savings of time, labor and cost and
    demonstrate quantitative ROI
  •  -Proactive campaign management is like a good
    wineit gets better with age.
  • -Tracking campaign success results in higher
    response rates and greater ROI
  • -Use of results of campaigns to refine future
    campaigns has been acknowledged as the best CRM
    practice.

7
CRM Marketing Initiatives
  • Cross-selling and Up-Selling
  • Customer Retention
  • Behavior Prediction
  • Customer Profitability and Value Modeling
  • Channel Optimization
  • Personalization
  • Event-Based Marketing

8
Cross Selling and Up Selling
  • Cross-selling- the act of selling a product or
    service to a customer as a result of another
    purchase.
  • Example- New mothers buy clothes for their babies
    and then themselves as well.
  • Up-selling- motivating current customers to trade
    up to more profitable products.
  • Example- McDonalds super size option.

9
Cross Selling and Up Selling Ctd.
  • These two forms of selling are an art and knowing
    which products will increase the customers
    buying is the key.
  • Here are some things to think about
  • Selling customers something they wouldnt want or
    need could cause them to buy less.
  • Not every customer is a good candidate for these
    types of selling.
  • Understanding the ways how and whether the
    customer responds to promotions

10
Customer Retention
  • Understanding why customers leave for competitors
    is key to find ways to retain them in the future.
  • Churn- the customers leaving one business for its
    competitors.
  • When a customer leaves there is
  • Loss of revenue
  • Loss of investment in acquiring them

11
Customer Retention Ctd.
  • Loss of stable market for new products
  • Businesses have studied the characteristics of
    those who have left their business to understand
    why, to predict who might leave next, and to find
    out who is desirable to keep.
  • They also are tying to find what method might
    work best to keep these customers, such as
    promotions or free stuff

12
Behavior Prediction
  • This uses past consumer behavior to foresee the
    future behavior of their customers.
  • This analysis includes several variations.
  • Propensity-to-buy analysis- understanding what a
    particular customer might buy.
  • Next Sequential Purchase- predicting the
    customers next buy.
  • Product Affinity Analysis- Understanding which
    products will be bought with others. Also known
    as market basket analysis.
  • Price elasticity modeling and dynamic pricing-
    determine the best price for a given product.

13
Behavior Predictions Ctd.
  • The marketing decisions that come for this
    analysis
  • Preemptively offering discounts or fee waivers to
    existing customers who are at risk of churning.
  • Refining target marketing campaigns so smaller
    customer segments or specific products.
  • Packaging certain products together and
    fixed-pricing them to sell more products and
    increase their profitability.
  • Cross-selling products likely to be purchased
    with other products.

14
Customer Profitability and Value Modeling
  • Customer Profitability- deals with the companys
    view of the possible profit to be made from its
    customers.
  • Value Modeling deals with the value of the
    customers other features like ability to bring
    in more profitable customers or the potential to
    be a more profitable customer.
  • Value modeling is only as accurate as the
    customers data is rich.

15
Channel Optimization
  • Offering the right message to the right customer
    at the right time.
  • Example Customers who us Internet banking
    services might prefer a new emailed offer with
    their regular statement and a customer visiting a
    branch office might prefer a cup of coffee along
    with a brochure.
  • Once you understand the channels your customers
    prefer to interact with your company you must
    then decide what is the best way to communicate
    with them.

16
Personalization
  • This is the capability to customize customer
    communication based on knowledge preferences and
    behaviors at the time interaction.
  • Examples a site you bought CDs from greet you
    and offers you CDs that are of your favorite
    artists when you enter the site or the home
    shopping channel operator greets you on when you
    call and helps you quickly purchase what you need
    and all because you shopped there once before.

17
Personalization Ctd
  • The first example used variable insertion to
    personalize the site for the current customer
    because it had information recorded from the last
    transaction. Over time, the customer is more and
    more known to the company through study of the
    customers profile data, past purchases, click
    stream data, and web survey responses. Then the
    company knows what to offer the customer to
    entice them to buy more or keep them from
    churning.
  • Example if a person responds to a discount on
    skis then they might also buy cold weather
    apparel.
  • Using personalization can take out he guess work
    in your business.
  • Personalization in the B2C space is based on
    studying click stream data (ones navigation path
    through a companys Website.

18
Clickstream
  • Clickstream monitoring includes how customer
  • Reached site
  • Traveled through site
  • Spent his time and how much did he spend
  • What was bought that stimulate buys of other
    products
  • Analysis of clickstream can trigger new tactics
    in companies. Examples
  • Changes in Web impressions according to
    customers clickstream
  • Custom promotions or discounts based on past
    purchases of research.
  • Customized web pages according to the visitors
    use of site.

19
Event Based Marketing
  • This is a time sensitive marketing or sales
    communication reacting to a customer-specific
    event.
  • Example sending an application for collision
    insurance to people who recently had a car
    accident.
  • Businesses today are to focus in on the
    individual customer in a real time situation and
    get away from the blank event-based marketing.
  • An example of this ideal goal of reacting to
    customers event in near real time is when a
    customer receives coupons at the store, right
    after their purchase, that they might be
    interested in.

20
Event Based Marketing Ctd.
  • This kind of marketing requires solid process
    automation and a well calibrated workflow to be
    effective in influencing the customers buying
    behavior.
  • The ultimate goal of a company, despite the type
    of customer communication, is to get them to
    visit the store or website to buy products they
    are happy with.

21
Customer Privacy-One-to-Ones Saboteur?
  • Why is customer privacy a concern?
  • 11.1.Excessive amounts of available customer
    data- U.S. citizens can be uniquely identified by
    their date of birth, gender, 5-digit zip code
  • 2. Personalization tools enable users to
    understand a consumers behavior history and
    share that info. without consumer consent
  • 3. Identity theft
  • 4. Consumer harassment

22
  • Opt In Policy- policy that requires companies to
    receive customer permission to solicit personal
    data.
  • -This policy will require many businesses to
    rethink theyre marketing strategies and will
    result in millions spent on process and
    technology changes

23
In Order to obtain good CRM
  • Know which marketing message and channel to use
  • Know customers preferred interaction level 
  • Individual customers have different wants and
    needs, in order to reach these customers
    different marketing channels and interaction
    levels will be needed

24
Customer Privacy Preferences
  • Keeping record of Customer Privacy Preferences
    will help establish and maintain good customer
    relationships
  • Unspoken needs can be observed through past
    interactions

25

Marketing Automation Checklist for Success
  • Successful marketing is a result of
  •   A sound marketing process
  •  Industry specific marketing practices
  • Use of a variety of campaigns and analysis
    of the results

26
Questions asked by companies focusing on CRM
  • 1.     How do we focus our marketing campaigns
    on customers with whom wed like repeat
    business?
  • 2.     How do we migrate customers to lower-cost
    channels?
  • 3.     How do other organizations in the company
    see customers differently than we do and how
    does that influence our campaign message?

27
Questions asked by companies focusing on CRM
  • 4.     How can we anticipate products and
    services customer might want?
  • 5.     What is the best means of communicating
    with customers on an ongoing basis?
  • 6.     What tactics do we use to entice prospects
    to become customers?
  • 7.     How do we tie what weve learned about
    customers to improving overall customer
    satisfaction?
  • 8.     What keeps our most loyal customers loyal?

28
Make it Happen
  • Customer Relationships are about more than just
    understanding behaviors. Theyre about making
    them happen.
  • Eddie Bauer- customer service has been a
    trademark since 1920 when the 1st store opened.
  • 500 stores and 49 states later Eddie Bauer still
    concentrates on providing customers with the
    merchandise they want in an optimal way.

29
Eddie Bauer
  • Eddie Bauers 3 channels
  • 1.     Brick-and-mortar store
  • 2.     Catalog business
  • 3.     Internet site
  • Each channel thrives alone but together they
    compliment each other

30
Eddie Bauer Ctd
  • Strategy implemented
  • Eddie Bauer struggled in the mid-90s because the
    knowledge of its customers and its ability to
    respond to their requests were lacking.
  •  
  • To fix this, the company began developing new
    metrics for understanding customer behavior. The
    new intelligence allowed the Eddie Bauer to
    examine customer behavior and predict future
    behaviors through its rapid modeling environment.

31
Eddie Bauer Results
  • 1. They can keep track of customer spending and
    determine which customers use which channels and
    develop more personalized offers for its
    customers.
  • 2. Good communication with the customer requires
    the right channel at the right time.
  • 3. Sending the most valuable customers a
    broader assortment of products pays off.
    (Customer Retention)

32
CRM Never Ends
  • The never ending journey (figure 2-9)
  • CRM is a constant cycle to build customer value
  • It is a learning relationship between the
    business and the customers

33
Managers Bottom Line
  • Before Implementing customer Segmentation and
    CRM, plans MUST BE in place, or.
  • CRM can do more harm than good.

34
CRM Benefits
  • CRM provides insight in
  • Identifying high response campaigns
  • Understanding characteristics of high-value and
    potentially high value customers, and catering to
    them
  • Improves effectiveness of high-cost channels
    (face-to-face)
  • Personalized Communications for specific customer
    segments
  • Understanding of purchase patterns for future
    maximum buying potential

35
GOAL of CRM
  • To ensure your company is ALWAYS customers 1st
    choice
  • This can be done by
  • Moving C customers to B customers, and to
    keep A customers at that level
  • Marketing Process should be well definedshould
    act immediately
  • Marketing Department should not exist in a
    vaccumbut should be linked to all other business
    functions
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