MKT517

Customer Relationship Management

What it’s all about?
Lecture Outcome

Familiarity of the student with CRM definition and CRM as a business strategy

Dr. Pawan Kumar

What is CRM?
CRM is the strategic use of information, processes, technology
and people to manage the customer’s relationship with your
company (marketing, sales, services, and support) across the
whole customer life cycle.
 What CRM is essential for small businesses?
Customer Loyalty
Data Collection
Customer Service
Sales
Tracking Profits
Hiring

Dr. Pawan Kumar

Describe any exceptionally good or bad experiences that you have had with
company contact personnel in person, over the phone or over the internet.

Do you belong to any point, loyalty or frequency programs?

Are they effective in maintaining or increasing your business?

Do they increase your feelings of loyalty toward the company?

Dr. Pawan Kumar

The traditional shopkeeper who still maintains personal contact with their
customers is considered to have more (implicit) knowledge of their
customers than the CRM manager with expensive software and databases
at their disposal.

(a) Do you agree with this statement? substantiate your answer.

(b) In what areas does the (implicit) customer knowledge fall short?
Give an explanation.
(c) Why is it that the CRM Manager appears to lag behind the classic
shopkeeper?
Sales and Marketing Strategies
 COMPONENTS OF CRM
To satisfy customer expectation, CRM model
implementation needs to integrates the components of
CRM

• Technology
• Process
• People
Customer Value Proposition
 CRM as Business Strategy
• Short term Horizon-limited interest in the customer, measure their
success by their sales and the number of completed transactions. Market
share represents a very important criterion for success
• Long term Horizon- ‘tell’ and ‘listen’ more than they ‘sell’ and ‘send’, and
have a broader and deeper interest in the right customers
 Learning Outcome

Students will understand the CRM process and its

application in various industries
Recapitulate
Which of the following do you think is misconception
about CRM?
A. CRM is database marketing
B. CRM is about loyalty scheme
C. Both A and B
D. CRM is business strategy
Recapitulate
Which of the following is not the component of CRM?
A. Technology
B. People
C. Process
D. Product
 Value disciplines
Customer intimacy
Leading edge
Performance of market
leaders Minimum expectation

Operational excellence
Product leadership Cost leader
Best/newest product
Figure 3.1 Offensive versus defensive strategies
What is the role of CRM in Amazon Success Story?
 Amazon

A strong emphasis on the customer is the foundation of Amazon’s success –

and it’s the company’s intelligent use of CRM that has enabled this.
Developed in-house, Amazon’s CRM software captures customer data at the
point of purchase, which it uses to instantly customize its users’ online
experience.
 How do they do it?

1. Tailored offers and promotions

2. Personal data collection and storage
3. Recommendations
4. Customer support
5. Evolution of Services
 [Link]
02393498

CRM and Customer intelligence

CRM in social media (Social CRM)-customer centric marketing
CRM for Marketing
CRM for customer service

Conclusion: Overall, a company that effectively harnesses CRM is set to

scale efficiently. Deeper customer relationships translate to greater
loyalty and increased customer retention, which in turn increases
profitability.
How the building blocks of CRM would be
implemented?
The relationships between customer and supplier may be present at a
variety of levels and in various compositions (Peelen et al., 1996; Rowe
and Barnes, 1998).
 Let’s Discuss……

➢Analyze a relationship you have with a supplier or service provider as a

customer.

➢Choose a company with which you have a relatively close relationship.

➢Describe the trust and the commitment on the part of both parties in
the relationship, and explain how these have grown?
A variety of supplemental classifications have been created to further clarify the
differences between the parties involved in customer–supplier relationships.

These classifications indicate (including Payne, 1995; Peelen et al., 1989; Schijns,
1998):

● whether or not a transaction has already been completed: from prospect to

customer;
● if a long-term orientation is present which extends further than that one
transaction: from customer to client;
● to what degree the relationship is felt by both parties: from supporter to
ambassador;
● to what degree both parties take an active position in the relationship: from
ambassador to partner.
• Short term Horizon-limited interest in the customer, measure their
success by their sales and the number of completed transactions.

• Market share represents a very important criterion for success

• Long term Horizon- ‘tell’ and ‘listen’ more than they ‘sell’ and ‘send’,
and have a broader and deeper interest in the right customers
CRM Building Block
 Contents
Strategy and organisation of CRM (I)

CRM Marketing aspects (II)

Analytical CRM (III)

Operational CRM (IV)

CRM Systems and their implementation (V)

 Misconceptions about CRM

1. CRM is a database marketing

2. CRM is a marketing process

3. CRM is an IT issue

4. CRM is about loyalty scheme

5. CRM can be implemented by any company

Customer
retention

Customer
acquisition

Functionally
Cross- Functionally based
based
marketing
marketing
 Significance of CRM
 Increased sales revenue and reduced cost of sales

 Increased customer satisfaction

 Lower costs of recruiting customers

 Increased customer retention

 Evaluation of customer profitability

 Excellent customer service

 What CRM can do for your company?

To get closer to your consumers CRM can:

• Improve the services
• Improve customer satisfaction
• Identify your customers (worst or best)
• Reduce cost
• Create new customers

Source:[Link]
can-do-for-your-company
 Analyze

Q.1 Why dissatisfied customer remains stay with their supplier?

Q.2 In which industry, long term seller-buyer relationship is not
advisable?
Any Question
MKT517
Customer Relationship
Management
What it’s all about?
 Learning Outcome

Students will become familiar with the nature,

characteristics and formulation of customer strategy
A variety of supplemental classifications have been created to further clarify the
differences between the parties involved in customer–supplier relationships.

These classifications indicate (including Payne, 1995; Peelen et al., 1989; Schijns,
1998):

● whether or not a transaction has already been completed: from prospect to

customer;
● if a long-term orientation is present which extends further than that one
transaction: from customer to client;
● to what degree the relationship is felt by both parties: from supporter to
ambassador;
● to what degree both parties take an active position in the relationship: from
ambassador to partner.
Recapitulate

“You want to learn their reasons why they might consider stopping the
relationship, so you can do something to avoid it.”
Which of the following stage in Relationship Life Cycle?
A. Exploration
B. Maturity
C. Growth
D. Decline
 Identify the customer-supplier relationship?
A. whether or not a transaction has already (i)From customer to client
been completed
B. if a long-term orientation is present which (ii) From prospect to customer
extends further than that one transaction (iii) From ambassador to partner
C. to what degree the relationship is felt by
(iv)From supporter to ambassador
both parties
D. to what degree both parties take an active
position in the relationship
A.(ii),(iii),(iv),(i)
B. (ii),(i),(iv),(iii)
C. (i), (iv),(iii),(ii)
Contents of CRM

Strategy and organisation of CRM (I)

CRM Marketing aspects (II)

Analytical CRM (III)

Operational CRM (IV)

CRM Systems and their implementation (V)

 Misconceptions about CRM

1. CRM is a database marketing

2. CRM is a marketing process

3. CRM is an IT issue

4. CRM is about loyalty scheme

5. CRM can be implemented by any company

Customer
retention

Customer
acquisition

Functionally
Cross- Functionally based
based
marketing
marketing
 Significance of CRM

 Increased sales revenue and reduced cost of sales

 Increased customer satisfaction

 Lower costs of recruiting customers

 Increased customer retention

 Evaluation of customer profitability

 Excellent customer service

What CRM can do for your company?

To get closer to your consumers CRM can:

• Improve the services
• Improve customer satisfaction
• Identify your customers (worst or best)
• Reduce cost
• Create new customers

Source:[Link]
can-do-for-your-company
What CRM is all about from industry insights?
• CRM stands for Customer Relationship Management. Generally, it is a
set of strategies, tools, techniques, and technologies that enterprises
use to develop, retain as well as acquire customers.
• CRM, or customer relationship management, is a company-wide
business strategy designed to reduce costs and increase profitability
by solidifying customer satisfaction, loyalty, and advocacy
 Analyse

Q.1 Why dissatisfied customer remains stay with their supplier?

Q.2 In which industry, long term seller-buyer relationship is not
advisable?
 Case:

Working with Salespeople

Salespeople are part of an overall team. When a salesperson tries to work independently, the results are not
always very effective. This activity highlights an ineffective situation for a mobile home loan salesman for a bank.
Review the situation – what can you recommend to improve the firm’s current sales appointment practices?
 Case

ACTIVITY/TASK

• When customers phone the bank’s call center and inquire about a home loan they are always offered an
appointment the mobile home loan salesperson (who will come out and visit them).

• If they are interested, the appointment is then immediately booked in the mobile lender’s electronic diary.
Each day the mobile lender checks his electronic diary and goes to the scheduled appointment/s.

• However, the mobile lender has become very unhappy that the call centre is making appointments with people
who are not ready to buy yet (many just want information).

• He is complaining that the call centre “is wasting his time” and wants something done about it!
Let’s Discuss…….

• Why is the salesperson unhappy in this situation?

• Would the call center staff be happy in always passing the sales inquiry to the
salesperson? Why?
• How did this disorganized situation occur? (Who’s at fault?)
• What would you recommend to improve this situation/practice?
 Case Let
• Berkley -The IELTS coaching institute has always been on the forefront of new digital technologies.
In 2018, they found themselves betting on a new strategy for lead generation and nurturing.

• At the core of that strategy was content designed for their target market. They are producing
content around digital marketing, but it wasn’t reaching out to the right target customers, or
producing the high-quality leads they need.

• They were piecing together many different tools to service both themselves and their clients. This
included tools like MailChimp for email, Hootsuite for social media, Moz for SEO, and Google
Analytics for web analytics.

• There was no effective way to tie these tools together to see all of a prospect's interactions across
different channels. The owner explains that they had no idea who the people looking at those
posts were. Essentially, they knew there had to be a better way to identify and segment our
leads.
 Case Let
• Mr. Prakash, who heads Berkley Marketer’s inbound strategy explains the challenge, “If we had
talked to prospects in the past and they re-engaged with our services or trainings, our current set
of tools didn’t give us that information.

• Our sales reps had to go through the entire qualification process again, which was almost like cold
calling, because there was no actual context once a rep got on the phone with someone.

• We were hungry for a technical solution that integrated all our customer data, and helped our
marketing and sales teams utilize that information for more personalized services.”

• Without a complete view of the customer and all their digital touch points, the team struggled to
align their efforts around one goal.
Tell……

Q.1 What is the problem in the case?

Q.2 What is inbound and outbound strategy?
Q.3 What is the solution for this problem?
Q.4 How can we increase customer experience?
MKT517
Customer Relationship
Management
What it’s all about?
 Learning Outcome

Students will know about role of CRM systems in relationship

management and culture and structure of a relationship oriented
organisation
Recapitulate

• Winning and keeping profitable customer is a __________type of

CRM
A. Strategic
B. Analytical
C. Operational
D. All of the above
Tell

Organisations transforms customer related data into actionable insights

is _________type of CRM.
A. Strategic
B. Analytical
C. Operational
D. All of the above
According to your opinion, what are the key benefits of CRM?
Few Question….
• What characterizes the mission of the relationship-oriented
organisation applying a CRM strategy?
• What is characteristic for the culture of a relationship-oriented
organisation?
• What is the structure of a relationship-oriented organisation?
• What is the customer pyramid and how does it relate to the
organisation of relationship management?
• What is the role of CRM systems in relationship management?
Let’s Discuss

According to your opinion what is the relevance and benefits of a

relationship-oriented culture in a travel agency?
Here a few tips for your travel agency to become more relationship-oriented:

• Meet in person. Nothing beats face-to-face interactions. It is worth the extra time
and money.
• Choose your team according to those who adapt and are good at building
relationships.
• Always cooperate on a face-to-face basis to fasten the relationship-building
process.
• Help the same customer each time to demonstrate you want to engage in a long-
term relationship.
• Use the telephone, rather than e-mail, if you cannot meet in person. If necessary,
summarize the conversation in an e-mail.
• Send e-mails in a conversational manner, rather than just making use of bullet
points.
• Avoid rushing into decisions if the customer is not sure yet.
Source: ([Link], 2017)
Answer

• The supply chain becomes more effective, modernised and alert to rapidly
changing markets, technology, and customer needs.

• As trust and confidence within the working atmosphere growth, employees do

not simply propose improvements in on-going processes; they rather actively
reach out to their environment with new improvement options and plans that
make the company more market competitive.

• Even at the economic level, a well-organised culture leads to growth in

productivity and performance. A culture that intensely engages people is
understandably a lot more productive (Phegan, 2013).
The relationship-oriented culture

• ‘People dare to show their true selves.’

• People with ‘well-developed right brain hemispheres’
are deployed.
• Overtures are made in the proper manner; a
sufficient level of empathy is shown in the other.
• People come across as sincere.
Structure: organising around customers

The customer pyramid

People

Social competencies:

• the capacity for empathy;

• the ability to create congruence;
• the ability to use an unconditionally positive approach
to the other person.
From strategy to critical success factors
Balanced scorecard for a Japanese restaurant
10-47
Customer Relationship
Management
What it’s all about?
 Learning Outcome

Students will understand the value of customer knowledge

and how to transform data into customer knowledge. They
will be able to combine data from various sources to
develop the customer image
Recapitulate

Which of the following is not required to make product oriented organisation

to Relationship oriented organisation?
A. Leadership
B. Culture
C. Structure
D. Human Capital
E. Profit
Recapitulate

___________focus on the automation of customer facing process such as

marketing, selling and customer support
A. Strategic
B. Analytical
C. Operational
D. All of the above
 Tell

__________ instruments are effective to manage the relationship

oriented organization.
A. The service profit chain
B. The balanced scorecard
C. Both A and B
D. People
Few Question to Ask….

 What is the value of customer knowledge?

 How to utilise data: taking action based on customer data
 What demands are placed on the use of customer data that represent an
important asset
 for the organisation?
 How to organise for data management (various stages of professionalisation).
 How to transform data into customer knowledge (developing the desired
customer
 profile).
 How to combine data from various sources to develop the customer image.
 How to respect privacy
 Let’s Discuss

Can you share any experience of any company which is not relationship oriented company and
describe how this the case as your experience?
 Case Let: Working with Salespeople

Salespeople are part of an overall team. When a salesperson tries to work independently, the results are
not always very effective. This activity highlights an ineffective situation for a mobile home loan salesman
for a bank. Review the situation – what can you recommend to improve the firm’s current sales
appointment practices?

ACTIVITY/TASK
When customers phone the bank’s call center and inquire about a home loan they are always offered an
appointment the mobile home loan salesperson (who will come out and visit them). If they are interested,
the appointment is then immediately booked in the mobile lender’s electronic diary. Each day the mobile
lender checks his electronic diary and goes to the scheduled appointment/s. However, the mobile lender
has become very unhappy that the call centre is making appointments with people who are not ready to
buy yet (many just want information). He is complaining that the call centre “is wasting his time” and wants
something done about it!
 Let’s Discuss…….

 Why is the salesperson unhappy in this situation?

 Would the call center staff be happy in always passing the sales inquiry to
the salesperson? Why?
 How did this disorganized situation occur? (Who’s at fault?)
 What would you recommend to improve this situation/practice?
‘High costs are associated with owning data, and Gartner believes that
having bad data can increase these costs by a factor of 10 when one
considers costs arising from bad business decisions and poor CRM based on
such data.’

Gartner Research, Customer Data Quality and Integration: The Foundation of Succesful
CRM, 26 November 2001
Growth stages in database management
The use of different sources of information to create a complete customer profile
Privacy

The right of objection and the various channels of communication

 Addressed e-mail: opt-out
 Telephone (voice): opt-out
 Fax: opt-in
 Automatic telephone calls without human intervention opt-in
 Unaddressed e-mail opt-out
 E-mail: customers ‘soft-opt-in’
prospects opt-in

opt-out: right to block by data subject him/herself

opt-in: prior permission needed from data subject to send messages
MKT517
Customer Relationship
Management
What it’s all about?
 Learning Outcome

Students will know about role of CRM systems in relationship

management and culture and structure of a relationship oriented
organisation
 Learning Outcome

Students will learn the significance of use of channels for different

types of customers in a variety of situations
Recapitulate

The data which are received by companies via e-mail and the Internet on the
identity of customers apparently have a relatively low level of reliability.
a. What could be the underlying reasons for this?
b. Name three and explain your answers.
c. What can a company do to guarantee the quality of these data?
Discussion

• Under what circumstances does direct mail remain the preferred

communication tool?
• Why is relationship marketing effective in the market for nappies and
other baby products?
Discussion

• How brands and businesses who use Twitter for customer service?
• What is social CRM? Why companies are shifting from traditional CRM to
social CRM.
• How social CRM adds value to the customer?
Dimensions in which channels may be scored
 One-stop shopping
Source: Jupiter Media Metrix.
Contact processes through different channels per segment
 Channel management
Advice
High Advice
High Margins

Face

Lower Advice
Medium Margins
Call

Commodities
Low Margins
Click

Leads and sales

Low Margins
Mail
Margins

Subtly moving the client to the most efficient and most effective channel combination.
Tell

Q.1 For high advice and high margins, which channel of communication will
be preferred?
A. Mail
B. Click
C. Call
D. Face
Think and Tell

• Creating a distinction between the communication and service levels

of so-called gold, silver and bronze customers can lead to irritation
among customers.
• How can this irritation be prevented?
• In your opinion, how should a company handle this situation?
 Probable Questions
• How to measure and control for the quality of relationship data used to
identify customers?
• How can we profile customers?
• What types of databases are there (structured and relational)?
• Which characteristics may be used to describe customers?
• How can we measure these characteristics?
• How can we maintain the customer profile?
• What types of external and internal sources (lists) are there to expand the
database qualitatively and quantitatively?
Discussion…..

• Which measures would you recommend a company such as a holiday

park to use to manage the intrinsic quality of the data which allows it
to identify its customers?
Relationship data used to identify a customer
include:
(a) the basic data consisting of name, address, gender and company
name;
(b) supplementary data on the date of birth or incorporation date,
nationality or industry, telephone number, legal form, company
registration number.

CRM can serve as an analytical tool to create a sales pipeline for

forecasting and improving customer satisfaction.
It also helps with creating personalized experiences based on past
interactions.
Discussion…..

• How a company which is facing the high customer churn rate (issue of
less repeat purchase), can manage this problem.

• What all data points will you be considering for analysis to come up
with a solution?
What are the data sources for CRM?
-Internal sources
-External sources
[Link]
[Link]
Sub-aspects of analytical CRM
 Data quality operationalised
• Complete
•Within the record
•Within the universe
• Current
•Up-to-date
• Correct
•Form
•Content
• Valid vs. correct
• Integrity
• Unique
•No duplicates?
Identification
Term Definition Measurement

Accessibility Percentage of customers 95% x

identified in call centre in
less than 30 seconds
Complete Percentage of customers 40% x
with complete file
Correct NA, phone, e-mail 48% =
transaction history
Data quality call centre 18%
Identification

Term Definition
Consequences for Measure-
call center ment
strategy/objectives
Accessibility % customers identified in 95% x
call center < 30 sec
Costs to correct mistakes
Complete % customers with complete 40% x
fileCustomer satisfaction
Correct NA, phone, e-mail 48% =
Employee
transactionsatisfaction
history and
retention
Data quality 18%
call center Missed turnover
Data quality – identification
the business case

The value of
data quality Returned . . .

Billing
The costs of a
lack of quality Irritation

Waste

Conversion

Cross-selling
The added value
of quality
Retention, etc.
Figure 9.1 Socioconsult compass
Source: © Motivaction International B.V. 1999 [Link]
 Social environments in Europe
Source: © Motivaction International B.V. 1999 [Link]
.

• Queries……………………
MKT517
Customer Relationship
Management
What it’s all about?
Lecture Outcome

Students will describes how an accurate, complete, current and unique

customer profile develop in databases
 Probable Questions
• How to measure and control for the quality of relationship data used to
identify customers?
• How can we profile customers?
• What types of databases are there (structured and relational)?
• Which characteristics may be used to describe customers?
• How can we measure these characteristics?
• How can we maintain the customer profile?
• What types of external and internal sources (lists) are there to expand the
database qualitatively and quantitatively?
Discussion…..

• Which measures would you recommend a company such as a holiday

park to use to manage the intrinsic quality of the data which allows it
to identify its customers?
Relationship data used to identify a customer
include:
(a) the basic data consisting of name, address, gender and company
name;
(b) supplementary data on the date of birth or incorporation date,
nationality or industry, telephone number, legal form, company
registration number.

CRM can serve as an analytical tool to create a sales pipeline for

forecasting and improving customer satisfaction.
It also helps with creating personalized experiences based on past
interactions.
Discussion…..

• How a company which is facing the high customer churn rate (issue of
less repeat purchase), can manage this problem.

• What all data points will you be considering for analysis to come up
with a solution?
What are the data sources for CRM?
-Internal sources
-External sources
 Scenario
You're a marketing manager at an up-coming eyewear Web site, [Link].
Your company has just deployed a so-called data webhouse and for the past few days
you've been looking over your data analyst's shoulder—they've just begun gathering
user clickstream data. Your data analyst, Jack, points out one session particular. You
notice that the shopper arrived at your site through a banner ad posted on a partner's
Web site: [Link]. After the shopper arrived at your site, he entered
his prescription and began looking at various brands of glasses. After browsing for
glasses, the shopper started comparing brands of contact lenses. He finally selected a
brand of contacts and placed the product in his shopping cart. He entered the order
information, including his credit card number, but left the site rather than submitting his
data and completing the purchase.

Discussion Question:
How do you entice this shopper to return to your site and buy something?
Clickstream: Clickstreams con note how the user arrived at the site, how long he stayed,
what he did during his visit, and when he returned.
Probable solutions
• To mail them a coupon for Rs.150 off a new pair of fashion eyewear
• To e-mail the visitor a discount code—a coupon is given a unique
code so no one but the given customer can redeem it—for Rs450 off
a new pair of hard contacts or three pairs of disposable lenses (a
predictive model could confirm this as the best course of action).
• Personalization-Tailoring communications directly to a customer
segment or, increasingly, to an individual customer by collecting
sufficient customer data so as to market to an individual's unique
needs, both now and in the future.
• Collaborative filtering-personalized recommendations on the web
[Link]
[Link]
Sub-aspects of analytical CRM
 Data quality operationalised
• Complete
•Within the record
•Within the universe
• Current
•Up-to-date
• Correct
•Form
•Content
• Valid vs. correct
• Integrity
• Unique
•No duplicates?
Identification
Term Definition Measurement

Accessibility Percentage of customers 95% x

identified in call centre in
less than 30 seconds
Complete Percentage of customers 40% x
with complete file
Correct NA, phone, e-mail 48% =
transaction history
Data quality call centre 18%
Identification

Term Definition
Consequences for Measure-
call center ment
strategy/objectives
Accessibility % customers identified in 95% x
call center < 30 sec
Costs to correct mistakes
Complete % customers with complete 40% x
fileCustomer satisfaction
Correct NA, phone, e-mail 48% =
Employee
transactionsatisfaction
history and
retention
Data quality 18%
call center Missed turnover
Data quality – identification
the business case

The value of
data quality Returned . . .

Billing
The costs of a
lack of quality Irritation

Waste

Conversion

Cross-selling
The added value
of quality
Retention, etc.
Figure 9.1 Socioconsult compass
Source: © Motivaction International B.V. 1999 [Link]
 Social environments in Europe
Source: © Motivaction International B.V. 1999 [Link]
.

• Queries……………………
MKT517
Customer Relationship
Management
- Segmentations and Selections
-Data Analysis and Data Mining
Lecture Outcome

Students will describes how an accurate, complete, current and unique

customer profile develop in databases
Data quality – identification
the business case

The value of
data quality Returned . . .

Billing
The costs of a
lack of quality Irritation

Waste

Conversion

Cross-selling
The added value
of quality
Retention, etc.
Figure 9.1 Socioconsult compass
Source: © Motivaction International B.V. 1999 [Link]
Social environments in Europe
Source: © Motivaction International B.V. 1999 [Link]
Lecture Outcome

Students will implement segmentation study as input for the

formulation of the marketing strategy and segmentation research used
in CRM
Tell

What are the segmentation of CRM by Types?????

Tell

The one-size-fits-all marketing approach doesn’t work anymore. Every

prospect wants to be talked to directly. You ought to understand your
customers better. Which of the following statement is true?

A. Deliver personalized experiences with customer segmentation

B. Personalize your campaigns
C. Both A and B
D. Neither A nor B
Probable Questions

• How can we define segmentation?

• What are segmentation criteria?
• Segmentation for the benefit of strategic marketing issues:
• How to divide the market up into segments?
• How to profile the segments?
• How to develop the marketing service concepts per (group of)
segment(s)?
 Alpe d’ huZes
Each year on Alpe d’Huez a charity sporting event is hosted. Thousands of people form teams and climb
up and down the famous mountain, following a route which is a wellknown stage in the Tour de France
cycle race; they do so to raise money for cancer research. The event is named Alpe d’HuZes. The change to
the name is a pun, intended at the number of times one is challenged to climb the famous mountain: ‘Zes’
is Dutch for six.
A study has been done on the participants’ motivation; four clusters were formed of people with different
underlying attitudes, values, beliefs, assumptions, intentions, goals and motives. Personas were
formulated for them. They were useful for the organisation in selecting and dealing with the teams. The
average size of a team was five people and the majority of the bikers were first time participants. They
climbed Alpe d’Huez on average 4.4 times; each time raising more money. The four clusters can be
described as follows, based upon their motivation:
1 Health Junkies. This group was labelled ‘Health Junkies’ because of the underlying motive that
contributing to the cause and participating in this sporting event was mainly found in health and a healthy
lifestyle, the thrill and entertainment of the event and the challenging aspect of contending with nature.
The strong relation to personal wellbeing and health as a driver to engage in financially supporting a good
cause is possibly due to either personal experience of the illness or knowing someone who lost the battle
against cancer
The entertainment provided by the event was important to this cluster. Being with friends, peer-pressure and personal
challenge, along with a sense of brotherhood influenced their decision as well as giving back to the community and
participating in nonprofit activities in general. Their motivation to participate was not found in the aim to inspire patients,
support families or raise national awareness. Health Junkies were not in particular convinced by their company to take part
in the event, nor were they striving to compete with others or improve their own cycling records.
2 Legends. This group has earned its name ‘Legends’ from the physical and emotional strength shown by its members. This
strength has enabled them not only to beat cancer, but also to come back and challenge themselves and others in this
competition. Because of their personal experience with the illness, they feel capable of and appreciate the support the
organization gives them in order to change the way cancer is addressed and strive for national awareness. This group most
likely became more aware of their own wellbeing and aim for a healthy lifestyle since they have survived a battle with
cancer.
3 Caretakers. Caretakers consisted of participants who were mainly driven by humanity emphasising the importance of
easing of emotional burden and the possibilities to help and inspire others. They did not seek for social engagement or
empowerment in order to change the way cancer is addressed. Weak links to the cause and the illness could explain the
lack of motivation found in fundraising.
4 Promoters. This group consists of fanatics and/or activists wanting to inspire those fighting against cancer. Their noble
goals and pursuit of significant change in the community and the way in which cancer is addressed serve as the base for
their identification with the organisation and the event.
Probable Question
How can personas help the Alpe d’HuZes organization in selecting
segments, and designing propositions and service concepts aimed at
increasing the amount of sponsor money raised?
The four cluster descriptions only cover the motivation of the
participants. How can the participant profiles be extended so we get a
‘real-life’ view of them?
How can organizations use these insights into personas to enrich the
participant profile in the database?
Types of analysis questions
• Segmentation and selections
• Acquisition analyses and selections
• Customer analyses and selections
• Retention analysis
• Relationship development analysis
• Cross, deep and up-selling analysis
• Analyses to determine the effectiveness of the way
that the customer is approached
• How may datamining (and statistical) techniques be used to enrich
the customer profile?

• How should the analysis process be designed?

• A thorough formulation of the problem, careful preparation of the
analysis question, how the data are prepared in the database for
analysis, the analysis itself, the report

• What is the significance of datamining?

• What are datamining techniques?
Phases in the analysis process
 Datamining

• The automated discovery of interesting, non-obvious patterns hidden in a

database that have a high potential for contributing to the bottom line

versus

• The discovery of knowledge in databases.

Datamining techniques

• Neural networks
• Evolutionary computation
• Association rules
• Decision trees
• Case-based reasoning
Tell……

In what ways will a prototype salesperson have to change in order to

transform him or herself into a good relationship manager?
• Think of five examples of companies which implement a customer
intimacy strategy. Explain your answer.
Probable Answers

• Private bankers
• Financial service providers targeting the income category under
private banking clients
• Many saloon parlours
• Some travel agencies, especially the ones with a niche strategy (for
example Tropical Cyclist)
• Hotels such as …………
• Car dealers in the top segment of the market
• In your opinion, is it possible for the manufacturer of a low-
involvement product such as biscuits or crackers to implement a
customer intimacy strategy? Explain your answer.
• Even though biscuits or crackers are low-involvement products,
manufacturers can still foster a close relationship with their
customers by understanding and catering to their needs, engaging
with them, and rewarding their loyalty.

• This customer intimacy strategy can lead to increased customer

satisfaction, loyalty, and ultimately, business success.
1. Understanding Customer Preferences: By conducting market research and gathering data on
customer preferences, manufacturers can understand what flavors, textures, or ingredients are
preferred by their target audience. This can guide the development of new products or the
improvement of existing ones.

2. Personalized Marketing: With the help of data analytics, manufacturers can create personalized
marketing campaigns that resonate with individual customers.

3. Customer Feedback

4. Loyalty Programs

5. Community Building
Is customer experience the same as customer
service?
• No. And here's why.
• In most cases, a customer’s first point of contact with a company is usually by
interacting with an employee (either by visiting a store or by speaking on the
phone). This gives your business an opportunity to deliver great customer
service.
• However, customer service is only one aspect of the entire customer
experience.
• For example, if you book a vacation on the phone and the person you are
speaking with is friendly and helpful, that’s good customer service. Yet, if your
tickets arrive early and the hotel upgrades your room, then that’s a great
customer experience!

• That’s how the two are different!

How to Manage Customer Relationship with CRM?
Figure 8.3 Relationship policy per phase
Source: Peelen (1999).
Figure 8.4 Relationship policy by segment
Source: Peelen (1999).
 Incentives and loyalty programmes
• Savings programme
• Rewarding transactions; operant conditioning; stamps
• Club programme
• Subscribe; increasing involvement; providing information and eventually
discounts and service; cognitive processes; Fox Kids
• Relationship marketing programme
• Minimal purchase level; aimed at user situation; complementary goods and
services; frequent flyer programmes
Figure 8.5 Relationship management
Source: Alberts and Buitendijk (1995).
What are the core elements of CRM?
- Strategy: the CRM strategy
- Organization: the customer driven organisation
- Marketing:
• Customer knowledge
• Relationship management
• Contact management (channel management)
• The proposition (a customised offering)
- Analytical CRM
- Operational CRM
- The implementation of CRM and change management
• [Link]
software
.

• Queries……………………
 Lecture #13-14

MKT517
Customer Relationship Management
-Retention and cross sell analysis
Lecture Outcome

Students will examine both retention and cross sell analyses, evaluate
the effect of marketing activities on the customer relationship
Test your knowledge……

• The target market for cookbooks is predominantly female and over 25 while the
readership for comic books is mainly males between the ages of 15 to20.
• This is important __________ information for a publisher to know.

A. Psychographic
B. Socioeconomic
C. Demographic
D. Geographic
Customer satisfaction with the purchase of a product is dependent upon what?

A. The product's performance relative to the buyer's expectations

B. The product's performance relative to the price

C. The product's performance relative to the service

D. The product's performance relative to the quality

Discussion Questions….
How to evaluate a retention analysis.
- What is a retention analysis?
- How to evaluate the exploratory analysis?
- How to evaluate the variable selection for the final model (the role
played by an information gain chart).
- What do the model development and the choice of an analysis
technique imply?
- How to interpret the results.
Discuss
• Banks have very few customers who end the relationship. People are
generally not quick to close a current account.

• Does this mean that a retention analysis for a bank is of little use?

• Or do you see potential for a (variation on a) retention analysis?

Explain your answer.
Tell…..

• Under which circumstances will deep selling produce a more

economically desirable result than cross-selling?

• Explain your answer.

Retention
• Retention, in a marketing sense, means holding on to customers. If a
company becomes aware in time of those customers who
demonstrate an increased likelihood of ending the relationship, then
it can take action to prevent this.

• In order to be able to determine this likelihood or probability,

companies must arrive at definitions of former and current
customers.
Retention
• Does someone become a departing customer at the moment they no
longer buy a certain product; a consumer, for example, stops buying
fresh meat at a particular supermarket but continues to shop for a
variety of packaged goods?
Exploratory Analysis
• In order to determine the importance of the retention analysis,
several exploratory economic analyses can be performed to gain
insight into the flows of money that are leaving the organisation.

• Figure 9.1 illustrates the level of cash outflow for a financial institution’s
investment product over a period of four years. A specification is also provided for
the withdrawal’s destination: will the capital be invested elsewhere, saved, or will
it even be appropriated outside the company?
Figure 9.1 Outflow analysis
Figure 9.2 Origin and destination matrix
Exploratory Analysis
• In Figure 9.2 , the diagonals indicate which customers remain loyal to their brand.
The origin of the current customers for a particular brand is shown in the
columns, and the rows indicate the other brand to which a specific brand has lost
its customers.
Exploratory Analysis
• Figure 9.3 contains an illustration showing how the two groups can be separated
successfully on the basis of the date of their last cash withdrawal and the number
of funds that they hold. In this imaginary situation, it appears that quitters
(shown as squares) are distinct from stayers (the circles) through having:
● withdrawn money from their account after a certain date;
● purchased less than a certain amount of investment products.
Figure 9.3 An analysis outcome
Source: Eiben et al. (1995b).
Cross-selling
• Definition of cross-selling
• Cross-selling over time
 Customer buys more than one of the same product during a
contact (two life insurance policies)
 Customer buys two or more different products during a contact
(home contents and liability insurance policies)
 Customer buys a second or third product at a later time
Cross-selling
• Definition of cross-selling (cont’d)

• Cross-selling within product category

 Upgrade of the same product (deep selling)
 Customer buys another product within the same category
 Customer buys product from another category
• Within the household (not account number)
Cross-selling
• In order to obtain an indication of the economic significance of
cross-selling at an early stage, it can be determined how many
products the current customers are purchasing (as shown in
Figure 9.4).
• Calculations can be performed to determine which portion of
turnover and profit contribution can be accounted for by
customers who might be deemed the ‘heavy users’.
Figure 9.4 Contribution to turnover made by customers purchasing one or more
insurance products in the past year
Figure 9.5 continued
Figure 9.5 continued
 Lecture #15

MKT517
Customer Relationship
Management
-Customer knowledge
The individualized customer proposition
The relationship policy
Lecture Outcome

Students will examine and comprehend customer knowledge, the

individualized customer proposition, the relationship policy
• [Link]
 [Link]
/

[Link]
 • SEO isn’t a once-and-done task.

Which means your content

needs to be finessed,
updated, and promoted to
rise in the search engine
result pages (SERPs) and
secure your top-ranking spot.

search constantly changes. Google’s

algorithm isn’t static. It’s based on
artificial intelligence
The Methods of Well-Executed Search

Google wants to put the

absolute best page at the top of
the SERPs. So your page needs
to be the most relevant and the
closest match for searchers’
intent.
 Search marketing is about producing the right
content and publishing it on the right channels
to attract the right customers, then doing what it
takes to make your content rise to the top—
whether that’s for Google or any other channel.
The 6-Part Model for Winning at SEO
Let’s say the query is, “start a vegetable garden.” The asset
could be a blog post. Since people search for blog posts in
Google, that’s the channel you’ll optimize for.

Asset = blog post

Channel = Google search

But Google isn’t the only option. What

if they’re looking for images to inspire
them?
Or maybe they want to create
the best garden in their
community and want in-depth
information:
 Your goal is to choose an asset that will best answer the
intent/context you’ve identified, then choose the channel the asset
will live on. Once you’ve done that, you’re ready for the last stage of
the optimization process.
Traffic isn’t your end goal, remember. Your ultimate goal is to create leads
and sales. So you always need to tell visitors what their next step is, and
those directions need to be built into the asset.
Activity

• Create Customer Journey Map by using the Excel file Template shared
through LPU Live
Evaluating the effect of marketing activities on the
customer value
• Marketing performance
• Customer valuation: the life-time value
• Linking marketing investments to the development of the life-time
value
• How organisations can learn how their marketing activities correlate
with life-time value and other financial outcomes
Evaluating the effect of marketing activities on the
customer value
• The life-time value of all customers is a good indicator of the total value of a firm.

• After deducting the net present value of the total spending on overhead for the
period for which the calculation is made, the remaining amount tends to
accurately reflect the value of the organization.

• The goal of optimising the life-time value of a customer is consequently a goal

that benefits the entire organisation.
Evaluating the effect of marketing activities on the
customer value
Evaluating the effect of marketing activities on the
customer value
Evaluating the effect of marketing activities on the
customer value

• In Table 10.2, in which the acquisition is described, it appears that the acquisition
of large customers requires more effort than the acquisition of smaller clients.
• The greater amount of money spent by the larger customers cannot compare
with the additional efforts necessary to acquire the initial sale.
• By the end of the year, there is still no profit being earned in the large customer
segment.
 Lecture #15

MKT517
Customer Relationship
Management
-Customer knowledge
The individualized customer proposition
The relationship policy
Lecture Outcome

Students will examine and comprehend customer knowledge, the

individualized customer proposition, the relationship policy
Cross-selling
• Definition of cross-selling
• Cross-selling over time
 Customer buys more than one of the same product during a
contact (two life insurance policies)
 Customer buys two or more different products during a contact
(home contents and liability insurance policies)
 Customer buys a second or third product at a later time
Cross-selling
• Definition of cross-selling (cont’d)

• Cross-selling within product category

 Upgrade of the same product (deep selling)
 Customer buys another product within the same category
 Customer buys product from another category
• Within the household (not account number)
Cross Selling
The individualized customer proposition
The
Relationship Policy
• [Link]
 Lecture #17-18

MKT517
Customer Relationship
Management
-Operational CRM
• [Link]
Activity

• Create Customer Journey Map by using the Excel file Template shared
through LPU Live
Evaluating the effect of marketing activities on the
customer value
• Marketing performance
• Customer valuation: the life-time value
• Linking marketing investments to the development of the life-time
value
• How organisations can learn how their marketing activities correlate
with life-time value and other financial outcomes
Evaluating the effect of marketing activities on the
customer value
• The life-time value of all customers is a good indicator of the total value of a firm.

• After deducting the net present value of the total spending on overhead for the
period for which the calculation is made, the remaining amount tends to
accurately reflect the value of the organization.

• The goal of optimising the life-time value of a customer is consequently a goal

that benefits the entire organisation.
Evaluating the effect of marketing activities on the
customer value
Evaluating the effect of marketing activities on the
customer value
Evaluating the effect of marketing activities on the
customer value

• In Table 10.2, in which the acquisition is described, it appears that the acquisition
of large customers requires more effort than the acquisition of smaller clients.
• The greater amount of money spent by the larger customers cannot compare
with the additional efforts necessary to acquire the initial sale.
• By the end of the year, there is still no profit being earned in the large customer
segment.
Lecture Outcome

Students will examine and comprehend the concepts under

Operational CRM:
• multichannel management
• personal selling
• contact center management
• online environment-internet and website
Operational CRM

• Multichannel management
• One of the toughest challenges in CRM today is multichannel management,
including managing such complex and dynamic channels as social media and the
internet.

• How can we increase profit margins and revenue generated through customer
contact, while at the same time improving our accessibility, offering a better
customer experience and reducing the costs of our channel infrastructure?
Multichannel management

• In the meantime, the number of channels is growing and the technologies that
enable even more ways of communicating are seeing the light of day.

• Think about the speed with which we have seen the following channels develop:
web, e-mail, mobile (data and voice), text (SMS and MMS), kiosks and
multifunctional ATMs, interactive speech technology.

• The offering of services from third parties makes the adoption of channels easier
for organisations.
Multichannel management

• The challenge is to use knowledge gained on the individual customers to produce

a perfect combination of channels.

• Which channels best fit a certain type of contact?

• What differences should we apply between customer segments and customer

types?

• Which opportunities to learn and to collect information should be seized and how
do we work together with partners?
Multichannel management

According to Wilson, Street and Bruce (2008), aspects which play an important role
in the formulation of a multichannel strategy are:
• How do we translate our relationship strategy into channel combinations?
• How do we distinguish between segments?
• How do we manage the increased costs that are inevitable when opening up
more channels?
• How do we manage the complexity that is bound to increase when multiple
interconnected channels are used?
• How do we decide which channels to integrate?
• How do we measure and manage the performance of integrated channels?
Multichannel management

Whether or not change in the existing channel mix is actually desired depends on
three aspects (Wilson et al., 2008):

1 costs;
2 accessibility of the organisation;
3 customer experience that is offered (or rather, created).

The criteria are strategically relevant in judging whether or not the current channel
combination is working or needs to be adapted.
Multichannel management

Whether or not change in the existing channel mix is actually desired depends on
three aspects (Wilson et al., 2008):

1 costs;
2 accessibility of the organisation;
3 customer experience that is offered (or rather, created).

The criteria are strategically relevant in judging whether or not the current channel
combination is working or needs to be adapted.
Multichannel management
Multichannel management
Multichannel management
Multichannel management

• Imagine a concert, when the touch points occur during orientation, booking,
preparing for the event, travelling to the event, experiencing the event itself and
the period shortly after.

• The ‘touch points’ will not all take place within the same channel. On their way to
the concert, people may be informed over the radio, the telephone (text
messages from friends), the billboards alongside the road etc.

• The main goal is to have the touch points create a logic unity that has a clear
branded identity, which is consistent in terms of content, and that they are tuned
in to each other in terms of creating a continuous flow.
Multichannel management
Multichannel management
Multichannel management

• Differentiation is shown between three different segments – gold, silver and

bronze.
• It highlights the way channels are used and the quality of communication that is
demanded.
• In determining the level of differentiation, an organisation may have to make
difficult choices.
• Customers may view differentiation as discrimination. They may perceive the
differentiation as unfair, without valid reason, viewing it as another person
getting better treatment than them.
• The party feeling ‘disadvantaged’ might see it as a reason not to continue the
relationship.
Multichannel management
Multichannel management

• It may be practical, just to get an overview, to draw the paths typical customer
groups use in each phase from orientation to after sales in one diagram;
• The lines indicate the customer types or groups.
• These diagrams can be compared to the actual routing, where it is clear a portion
of customers will always deviate, but the dominant channels should be about
right for each customer group.
• The thickness of the line may indicate the percentage of customers within the
group following the path.
• By bringing together the customers, propositions and channels during several
customer contact moments (‘touch points’) in the relationship, we must take into
account that preferences are likely to change over time.
What is Operational CRM???

A centralized system that supports the sales, marketing, and customer

service functions within a company that stores information on
customers, leads, and employees using a shared interface.
How Does Operational CRM works????
Probable Questions
• What is the role of the Internet and the website in the contact cycle?
• How to build traffic applying on- and offline methods.
• How to measure the quality of the site visit.
- How can companies capitalize on visitors’ expectations?
- What direction should the development of the website’s functionality take?
• Various functionalities of websites. The influence of the context and the type of website on the
determination of the desired functionality.
• How to increase the quality of the web visit.
• How to improve the design of the page, the content and the website.
• How to convert visitors into buyers: how to entice visitors to buy.
• How to handle transactions by means of order-taking and payment systems.
Figure 16.1 The contact cycle on the Internet
Source: Cap Gemini.
Traffic building
• Online traffic building
• Cybermediaries
• portals, affiliate marketing programs, virtual communities,
integrators/malls, comparison sites, mobile agents and consumer
aggregated buying sites.
• Online marketing tools
• Advertising banners and buttons, search engines
• Offline traffic building
Figure 16.2 Site functionality and visitors’ expectations
Source: Bügel, 2002.
Meeting expectations
Creating trust
• The brand and the reliability of the organisation
• Presentation: the content, layout and design of the site
must disseminate the organisation’s objectives
• Navigation
• Seals of quality
• Technology (speed and functionality)
• Fulfilment
• Privacy
Table 16.1 Example of cost structures in the food sector
Source : Cost/profit Analysis Marketing and Logistics (2000).
Figure 16.4 Functionality of transactional websites in the stages of one-to-one
marketing
Source : Peppers and Rogers Group.
Activity
• Open your favourite shopping website/app and critical evaluate the
same.
• List down the three things which you would recommend to change
for the perfect user experience?

• _______________
• _______________
• _______________
 Lecture #19-20

MKT517
Customer Relationship
Management
-Operational CRM
Lecture Outcome

Students will examine and comprehend the concepts under

Operational CRM:
• multichannel management
• personal selling
• contact center management
• online environment-internet and website
Operational CRM

• Multichannel management
• One of the toughest challenges in CRM today is multichannel management,
including managing such complex and dynamic channels as social media and the
internet.

• How can we increase profit margins and revenue generated through customer
contact, while at the same time improving our accessibility, offering a better
customer experience and reducing the costs of our channel infrastructure?
Multichannel management

• In the meantime, the number of channels is growing and the technologies that
enable even more ways of communicating are seeing the light of day.

• Think about the speed with which we have seen the following channels develop:
web, e-mail, mobile (data and voice), text (SMS and MMS), kiosks and
multifunctional ATMs, interactive speech technology.

• The offering of services from third parties makes the adoption of channels easier
for organisations.
Multichannel management

• The challenge is to use knowledge gained on the individual customers to produce

a perfect combination of channels.

• Which channels best fit a certain type of contact?

• What differences should we apply between customer segments and customer

types?

• Which opportunities to learn and to collect information should be seized and how
do we work together with partners?
Multichannel management

According to Wilson, Street and Bruce (2008), aspects which play an important role
in the formulation of a multichannel strategy are:
• How do we translate our relationship strategy into channel combinations?
• How do we distinguish between segments?
• How do we manage the increased costs that are inevitable when opening up
more channels?
• How do we manage the complexity that is bound to increase when multiple
interconnected channels are used?
• How do we decide which channels to integrate?
• How do we measure and manage the performance of integrated channels?
Multichannel management

Whether or not change in the existing channel mix is actually desired depends on
three aspects (Wilson et al., 2008):

1 costs;
2 accessibility of the organisation;
3 customer experience that is offered (or rather, created).

The criteria are strategically relevant in judging whether or not the current channel
combination is working or needs to be adapted.
Multichannel management

Whether or not change in the existing channel mix is actually desired depends on
three aspects (Wilson et al., 2008):

1 costs;
2 accessibility of the organisation;
3 customer experience that is offered (or rather, created).

The criteria are strategically relevant in judging whether or not the current channel
combination is working or needs to be adapted.
Multichannel management
Multichannel management
Multichannel management
Multichannel management

• Imagine a concert, when the touch points occur during orientation, booking,
preparing for the event, travelling to the event, experiencing the event itself and
the period shortly after.

• The ‘touch points’ will not all take place within the same channel. On their way to
the concert, people may be informed over the radio, the telephone (text
messages from friends), the billboards alongside the road etc.

• The main goal is to have the touch points create a logic unity that has a clear
branded identity, which is consistent in terms of content, and that they are tuned
in to each other in terms of creating a continuous flow.
Multichannel management
Multichannel management
Multichannel management

• Differentiation is shown between three different segments – gold, silver and

bronze.
• It highlights the way channels are used and the quality of communication that is
demanded.
• In determining the level of differentiation, an organisation may have to make
difficult choices.
• Customers may view differentiation as discrimination. They may perceive the
differentiation as unfair, without valid reason, viewing it as another person
getting better treatment than them.
• The party feeling ‘disadvantaged’ might see it as a reason not to continue the
relationship.
Multichannel management
Multichannel management

• It may be practical, just to get an overview, to draw the paths typical customer
groups use in each phase from orientation to after sales in one diagram;
• The lines indicate the customer types or groups.
• These diagrams can be compared to the actual routing, where it is clear a portion
of customers will always deviate, but the dominant channels should be about
right for each customer group.
• The thickness of the line may indicate the percentage of customers within the
group following the path.
• By bringing together the customers, propositions and channels during several
customer contact moments (‘touch points’) in the relationship, we must take into
account that preferences are likely to change over time.
What is Operational CRM???

A centralized system that supports the sales, marketing, and customer

service functions within a company that stores information on
customers, leads, and employees using a shared interface.
How Does Operational CRM works????
Probable Questions
• What is the role of the Internet and the website in the contact cycle?
• How to build traffic applying on- and offline methods.
• How to measure the quality of the site visit.
- How can companies capitalize on visitors’ expectations?
- What direction should the development of the website’s functionality take?
• Various functionalities of websites. The influence of the context and the type of website on the
determination of the desired functionality.
• How to increase the quality of the web visit.
• How to improve the design of the page, the content and the website.
• How to convert visitors into buyers: how to entice visitors to buy.
• How to handle transactions by means of order-taking and payment systems.
Figure 16.1 The contact cycle on the Internet
Source: Cap Gemini.
Traffic building
• Online traffic building
• Cybermediaries
• portals, affiliate marketing programs, virtual communities,
integrators/malls, comparison sites, mobile agents and consumer
aggregated buying sites.
• Online marketing tools
• Advertising banners and buttons, search engines
• Offline traffic building
Figure 16.2 Site functionality and visitors’ expectations
Source: Bügel, 2002.
Meeting expectations
Creating trust
• The brand and the reliability of the organisation
• Presentation: the content, layout and design of the site
must disseminate the organisation’s objectives
• Navigation
• Seals of quality
• Technology (speed and functionality)
• Fulfilment
• Privacy
Table 16.1 Example of cost structures in the food sector
Source : Cost/profit Analysis Marketing and Logistics (2000).
Figure 16.4 Functionality of transactional websites in the stages of one-to-one
marketing
Source : Peppers and Rogers Group.
The role and function of personal sales

Transactional sales:

Transactional sales:

• The customer attaches value only to the product or service purchased; extras are
not required.
• The customer is aware of what is purchased and how it should be used.
• Their only interest is in getting a good price for the goods or service purchased.
• The sales process itself may create value by focusing on safety, efficiency and
ease of ordering.
The role and function of personal sales

The ‘complex sale’:

Consultative sales:

There is more than just the bare product and service that matter in this
purchasing situation.

The customer may be in doubt as to which product or service to buy or how to use
it once it has been bought. There is a need for ‘selection or application assistance’
or in other words ‘consulting’.
The role and function of personal sales
The ‘complex sale’:

Strategic sales:

These are seen mainly in business-to-business markets.

The customer is not just interested in the product or the product selection and
adoption, but also in the skills or competencies of the organisation.

The goal of the customer is to use the supplier to lift their organisation to a higher
level.
The role and function of personal sales
The ‘complex sale’:

Strategic sales:

These are seen mainly in business-to-business markets.

The customer is not just interested in the product or the product selection and
adoption, but also in the skills or competencies of the organisation.

The goal of the customer is to use the supplier to lift their organisation to a higher
level.
Personal Sales
The role of the sales agent is different for the three types of sales approach
(Marshall, et al., 2002; Rackham and DeVincentis, 1998).

In transactional sales,
• the role appears to be limited. Customers can be quoted saying ‘Never mind the
sales talk, just give me a proper quote.’
• It is perfectly feasible to substitute personal sales with other channels.
• If sales agents are to provide value, they need a capacity to ‘close the deal’, based
on product knowledge and sales skills.
Personal Sales
The role of the sales agent is different for the three types of sales approach
(Marshall, et al., 2002; Rackham and DeVincentis, 1998).

In transactional sales,
• Their success depends a great deal on their ability to ‘gain access’, often using
tactics that equate to the traditional ‘foot in the door’.
• The customer and the sales agent are opponents, the customer has the power
and there is no equal relationship.
• Buyer considerations relate predominantly to the product itself, the conditions
(subject of negotiations) and ease of ordering.
Personal Sales
The role of the sales agent is different for the three types of sales approach
(Marshall, et al., 2002; Rackham and DeVincentis, 1998).

• In consultative selling, personal sales are more important and other skills come
into play.
• Customer knowledge, both in terms of knowledge of the needs and wants as well
as usage criteria, becomes essential in the sales process.
• The consulting itself becomes valuable, sometimes even more so than the
product or service that is sold.
Personal Sales
The role of the sales agent is different for the three types of sales approach
(Marshall, et al., 2002; Rackham and DeVincentis, 1998).

In strategic sales,
• the role of the sales agent becomes less important and comes second to the
strategic relationship the buyer and supplier have forged.
• It is not about the purchasing and sales relationship, but about a strategic
collaboration that cannot exist without top management commitment to the
partnership.
The sales process

• Research into the success factors explaining the results achieved by

top sales agents confirm the importance of ‘sales process
management’.
Contact centre management
Contact centre management
Contact centre management
The service level of Contact Centre is naturally also dependent on the quality of the contact itself.
Critical points involved in determining and measuring the level of quality are:
• Are customer needs and wishes being interpreted correctly?
• Are details being noted correctly?
• Are customers not being angered or frustrated?
• Is the customer prevented from having to call back? Is initiative taken by the organisation?
• Are opportunities being captured to connect with the customer on a more personal level and is
valuable feedback being picked up?
• Has the transaction been completed, the question been adequately answered or the complaint
resolved?
Contact centre management
Activity
• Open your favourite shopping website/app and critical evaluate the
same.
• List down the three things which you would recommend to change
for the perfect user experience?

• _______________
• _______________
• _______________
 Lecture #21-22

MKT517
Customer Relationship
Management
-Operational CRM
Lecture Outcome

Students will examine and comprehend the concepts under

Operational CRM:
• multichannel management
• personal selling
• contact center management
• online environment-internet and website
Contact centre management
Contact centre management
Contact centre management
The service level of Contact Centre is naturally also dependent on the quality of the contact itself.
Critical points involved in determining and measuring the level of quality are:
• Are customer needs and wishes being interpreted correctly?
• Are details being noted correctly?
• Are customers not being angered or frustrated?
• Is the customer prevented from having to call back? Is initiative taken by the organisation?
• Are opportunities being captured to connect with the customer on a more personal level and is
valuable feedback being picked up?
• Has the transaction been completed, the question been adequately answered or the complaint
resolved?
Contact centre management
Activity
• Open your favourite shopping website/app and critical evaluate the
same.
• List down the three things which you would recommend to change
for the perfect user experience?

• _______________
• _______________
• _______________
 Lecture #19

MKT517
Customer Relationship
Management
- CRM systems and their implementation
Factor influencing the future of CRM
Implementation of CRM systems