CRM

UNIT 1: CRM BASIC NOTIONS AND CONCEPTS

1.1 What is CRM?
 The expression, Customer Relationship Management (CRM), has been in use since the
early 1990s.
 The acronym CRM means (for us) Customer Relationship Management (sometimes can
be used as the Customer relationship marketing)
 CRM is the core business strategy that integrates internal processes and functions and
external networks, to create and deliver value to targeted customers at a profit. It is
grounded on high-quality customer-related data and enabled by information
technology.
 Marketers are more and more able to deliver on these requirements thanks to ever-
increasing data sources, capabilities, and tools that can be utilized in conjunction with
the proven approaches and best practices from the fields of direct, database, and
customer relationship marketing. In a data-rich world, these specialties are marketers’
new best friends, helping to identify the key behavioural points for each shopper and
deliver the right message to the right individual at the right time, making them critical
to realizing the full potential of the AIM.
The expression CRM has more meanings:
 CRM is the process of managing all aspects of interaction a company has with its
customers, including prospecting, sales and service. CRM applications attempt to
provide insight into and improve the company/customer relationship by combining all
these views of customer interaction into one picture
 CRM is an integrated approach to identifying, acquiring and retaining customers. By
enabling organizations to manage and coordinate customer interactions across multiple
channels, departments, lines of business and geographies, CRM helps organizations
maximize the value of every customer interaction and drive superior corporate
performance.
 CRM is an integrated information system that is used to plan, schedule and control the
pre-sales and post-sales activities in an organization. CRM embraces all aspects of
dealing with prospects and customers, including the call centre, sales force, marketing,
technical support and field service. The primary goal of CRM is to improve long-term
growth and profitability through a better understanding of customer behaviour. CRM
aims to provide more effective feedback and improved integration to better gauge the
return on investment (ROI) in these areas.
 CRM is a business strategy that maximizes profitability, revenue and customer satisfaction
by organizing around customer segments, fostering behaviour that satisfies customers,
and implementing customer-centric processes.

1.2 THE CRM PARTS

 We can resolve the debate between managerial and technological schools by conceiving
of CRM as taking three main forms: strategic, operational and analytical, as summarized
(by Buttle and Maklan)
1.2 STRATEGIC CRM
 Strategic CRM is focused upon the development of a customer-centric business culture
dedicated to winning and keeping customers by creating and delivering value better
than competitors. Many businesses claim to be customer-centric, customer-led,
customer focused or customer - oriented but few are
 Customer - centricity competes with other business logics: product-oriented, production
– oriented, sales – oriented, a customer or market-oriented (by Kotler)
1.3 OPERATIONAL CRM
 Operational CRM automates customer - facing business processes. CRM software
applications enable the marketing, selling and service functions to be automated and
integrated.

1.4 ANALYTICAL CRM

 Analytical CRM, also called analytic CRM, is concerned with capturing, storing, extracting,
integrating, processing, interpreting, distributing, using and reporting customer-related
data to enhance both customer and company value.
 Analytical CRM builds on the foundation of customer-related information. Custome-
rrelated data may be found in enterprise-wide repositories: sales data (purchase history),
financial data (payment history, credit score), marketing data (campaign response, loyalty
scheme data) and service data. To these internal data can be added data from external
 sources: geo-demographic and lifestyle data from business intelligence organizations,
statistical offices…
1.5 BUT WHAT ABOUT THE SOCIAL MEDIA
 When social media generate customer-related data that are used by companies to manage
customer relationships, social media support and enhance analytical CRM Where
consumers use social media (e.g. Facebook) to make purchases, social media become part
of operational CRM.

UNIT 2: CUSTOMER CENTRICITY

2.1 WHAT IS CUSTOMER CENTRIC?
 Customer-centric (also known as client-centric) is a business strategy that’s based on
putting your customer first and at the core of your business in order to provide a positive
experience and build long-term relationships
 When you put your customer at the core of your business and combine it with Customer
Relationship Management (CRM), you collect a wealth of data, which gives you a full 360
view of the customer. This data can then be used to enhance your customer’s experience.
o For example:
 You can use customer data to understand buying behavior, interests and
engagement
 You can identify opportunities to create products, services, and
promotions for your best customers
 You can use customer lifetime value to segment customers based on top
spenders
2.2 LONG TERM RELATIONS
 When we talk about long term relation, we talk about so called relationship marketing.

What is relationship marketing?

 Relationship marketing is a long-term strategy with the focus on building close

relationships with your customers.

2.3 HOW TO CREATE A RELATIONSHIP MARKETING STRATEGY

 1. Create an emotional connection with your customers - the more emotionally connected a
customer is to your brand, the more they will spend with you (build trust, show personality,
inspire confidence, deliver a great customer experience)
2. Establish a meaningful reason for being in business - customers prioritize purpose-driven
attributes as more important than price or value, when choosing whom to do business with.
Today’s consumers want to do business with companies that stand for something – whether
it’s volunteering, supporting equality and fighting injustice or tackling environmental issues.
3. Leverage your community - When you have deep connections with your customers, and
your brand is purpose-driven, communities will naturally form. A brand community, at its
core, is a vital group of customers who support and promote your brand whenever they
can.
2.4 WHAT IS 360 DEGREE CUSTOMER VIEW
• A 360-degree view of a customer is a collection of all your customer data in one place. From
the basic contact information on customers, to all their past and present purchasing data
and all interactions with customer service, as well as their social media behavior.
• 360 degrees is a relationship cycle that consists of many touchpoints where a customer
meets the brand. Be it through purchases or marketing communications, via customer
service or on social media.

UNIT 3: CRM AS AN IT SOLUTION

3.1 STRATEGIC CRM
 Strategic CRM is focused upon the development of a customer-centric business culture
dedicated to winning and keeping customers by creating and delivering value better than
competitors.
 Many businesses claim to be customer-centric, customer-led, customer focused or
customer-oriented but few are. Indeed, there can be very few companies of any size that
do not claim that they are on a mission to satisfy customer requirements profitably.
Customer-centricity competes with other business logics. Kotler identifies three other major
business orientations: product, production and selling

3.2 OPERATIONAL CRM

 Operational CRM automates customer-facing business processes. CRM software
applications enable the marketing, selling and service functions to be automated and
integrated.

3.3 ANALYTICAL (OR ANALYTIC) CRM

  Analytical CRM, also called analytic CRM, is concerned with capturing, storing, extracting,
integrating, processing, interpreting, distributing, using and reporting customer-related
data to enhance both customer and company value.

UNIT 4: CUSTOMER VALUE

4.1 CUSTOMER VALUE
A value proposition is an explicit or implicit promise made by a company to its customers that it
will deliver a particular bundle of value-creating benefits.
4.2 VALUE THROUGH CUSTOMIZATION
 CRM aims to build mutually beneficial relationships with customers, at segment, cohort or
individual level.
 One way of achieving this goal is to customize the value proposition.
 CRM aims to fit the offer, or some value-delivering parts of it, to the requirements of the
customer; it is not a one-size-fits-all approach – unless that is what the customer wants!
 Mass customization means that an organization is able to offer customized value
propositions to individual customers on a massive scale.

4.3 CUSTOMIZATION CAN BE APPLIED TO ANY PART OF THE OFFER

4.4 KEY ISSUES FOR CRM STRATEGISTS CONSIDERING CUSTOMIZATION ARE THESE:
1. Do customers want customized products and services?
2. What degree of customization is desired?
3. Will customers pay a premium for customization?
4.5 VALUE THROUGH THE MARKETING MIX
• In present marketing focused on the consumer is Marketing Mix based on 4P, not
enough. Service marketers’ response to these special characteristics has been to develop
a new toolkit for creating value propositions 7Ps.
 • Let's define the value through each part of Marketing mix

4.6 VALUE FROM PRODUCTS (AND SERVICES)

 Product-based value is experienced by customers when they benefit from the product
innovation, incremental benefits, product-service bundling and branding.
 Companies wishing to enhance customer-perceived value through service improvement
need to understand that their efforts should be focused on the service elements that are
important to customers and where current service performance is poor. If the customer’s
biggest problem is your failure to deliver on time, in full and with no error, it makes little
sense to invest in updating the livery of your vehicles and drivers
4.7 PRODUCT-SERVICE BUNDLING (PRICE)
 Product-service bundling is the practice of offering customers a package of goods and
services at a single price. Changing the composition of a "bundle" can have the impact of
increasing customer perceived value (f.e. longer guarantees, loans of interest rate,
services etc.)
4.8 VALUE FROM PEOPLE
 One of the more important jobs in CRM is the customer contact role. The customer contact
role is a boundary-spanning role. That is, the role occupant sits in the space between an
organization and its external customers. Many companies claim that people are their key
differentiators and a major source of customer value. This is especially so in professional
services such as counselling, consulting and coaching where people are the product.

4.9 VALUE FROM PHYSICAL EVIDENCE

 Physical evidence consists of the tangible facilities, equipment and materials that
companies use to communicate value to customers. Banks traditionally have occupied
buildings with columns, portico, steps and large, heavy doors. This is designed to
communicate conservative values, security and probity. McDonald’s uses primary colors,
bright lights and the ubiquitous golden arches in the form of the letter M. Hospitals convey
impressions of hygiene and care through white uniforms, immaculately clean premises and
well-maintained gardens.
 Online presence is also a form of physical evidence.
4.10 VALUE FROM CUSTOMER COMMUNICATION (PROMOTION)
 A significant change is that companies are now able to facilitate multilateral
communication:
 company-to-customer, customer-to-company and even customer-to-customer.
 Ttraditionally customer communication has been one way – from companies to customers.
The conventional tools for company-to-customer communication are unilateral:
 advertising, sales promotion, publicity, public relations and personal selling. With the
exception of selling, these communication channels are non-interactive.
 Customer–company communication is enabled through email, web-forms, instant
messaging, phone, web collaboration, as well as old-fashioned correspondence.
 Companies can also facilitate customer-to-customer (peer-to-peer) communication blogs,
chat-rooms, newsgroups, online communities and, increasingly, by using social media such
as Facebook and Twitter.
Collectively, these are known as customer-generated media (CGM)

4.11 VALUE FROM PROCESSES

 Where processes are a set of activities performed by people and/or technology in order to
achieve a desired outcome.
 Companies have thousands of processes. Many of these macro-processes have an impact
on customer experience or value perceptions, including customer engagement, market
management, product maintenance, and product design and engineering processes.
4.12 VALUE FROM THE CHANNELS (PLACE)
• The traditional task of distribution is to provide time and place utilities to customers. This
means getting products and services to customers when and where they want. Consumer
goods companies have usually constructed channels using intermediaries such as
wholesalers and retailers. B2B companies usually sell direct or employ industrial
distributors. The location of service providers may be critical or irrelevant to the creation of
value for customers. Customers want their grocery retailers to be conveniently located, but
don’t care where their Internet service provider is located.
4.13 VALUE TO THE CUSTOMER
 A company’s very existence is based on the premise that it creates value for its customers
– regardless of whether in terms of a good or a service, an end product or an input factor,
and whether in a B2B or B2C setting. Only when it achieves to deliver value to customers, it
is able to extract value from customers. Unsurprisingly, the majority of the most valuable
companies.

4.14 VALUE TO THE COMPANY: SATISFACTION-LOYALTY-PROFIT CHIAN (SLP)- discussion and

critical approach

• SPC is a key concept in the realm of customer management as it links CRM activities to
profits.
• The key underlying idea is that improving product and service attributes will lead to an
improvement in customer satisfaction. Increased customer satisfaction, i.e. increased value
for the customer is expected to lead to greater customer retention, which is often used as
a proxy for customer loyalty, which then is expected to lead to greater profitability or value
from the customer.

4.15 THE SATISFACTION-LOYALTY-PROFIT CHAIN (KUMAR- REINARTZ)

4.16 MODEL BY BUTTLE-MAKLAN

4.17 CUSTOMER SATISFACTION (1)

 Customer satisfaction is the customer’s fulfilment response to a customer experience, or
some part thereof.
 Customer satisfaction is a pleasurable fulfilment response. Dissatisfaction is an
unpleasurable fulfilment response.
 The ‘experience, or some part of it’ component of the definition suggests that the
satisfaction evaluation can be directed at any or all elements of the customer’s experience.
This can include product, service, process and any other components of the customer
experience.
 Recency of purchases (R),
 Frequency of purchases (F)
 Monetary value of purchases (M)
The most common way of operationalizing satisfaction is to compare the customer’s
perception of an experience, or some part of it, with their expectations. This is known as the
expectations–disconfirmation model of customer satisfaction. This model suggests that if
customers believe their expectations have been met, they are satisfied. If their expectations
are underperformed, this is negative disconfirmation, and they will be dissatisfied.

4.18 CUSTOMER LOYALTY (2)

• There are two major approaches to defining and measuring loyalty, one based on
behavior, the other on attitude.
• Behavioral loyalty is measured by reference to customer purchasing behavior. The most
loyal are those who have high scores on the three behavioral variables:
• R = Time elapsed since last purchase
• F = Number of purchases in a given time period
• M = Monetary value of purchases in a given time period

4.19 TWO DIMENSIONAL MODEL OF CUSTOMER LOYALTY

  Loyals’: are those who have high levels of repeat buying and a strong relative attitude.
 ‘Spurious loyals’: have high levels of repeat purchase but weak relative attitude. Their
repeat purchasing can be explained by inertia, high switching costs or indifference.
 ‘Latent loyalty’: exists when a strong relative attitude is not accompanied by repeat buying.
This might be evidence of weakness in the company’s distribution strategy, the product or
service not being available when and where customers want.

4.20 BUSINESS PERFORMANCE (3)

 Business performance can be measured in many ways. The recent trend has been away from
simple short-term financial measures such as quarterly profit or earnings per share. Leading
companies have moved towards a more rounded set of performance indicators, such as
represented by the triple bottom or balanced scorecard.
 The balanced scorecard employs four sets of linked key performance indicators (KPI):
financial, customer, process, and learning and growth. The implied connection between
these indicators is that people (learning and growth) do things (process) for customers
(customer) that have effects on business performance (financial). Customer-related KPIs
that can be used to evaluate business performance following the adoption of CRM include:
customer satisfaction levels, customer retention rates, customer acquisition costs, number
of new customers acquired, average customer tenure, customer loyalty (behavioural or
attitudinal), sales per customer, revenue growth, market share and share of customer
spending (wallet). https://www.youtube.com/watch?v=M_IlOlywryw
 Share of customer spend (share-of-wallet or SOW) is a popular measure of CRM
performance. If your company makes a strategic CRM decision to serve a particular market
or customer segment, it will be keen to measure and grow its share of the chosen
customers’ spending. Share of customer spend focuses on winning a greater share of
targeted customers’ or segments’ spending, rather than market share.

U5: RELATIONSHIP MARKETING

5.1 WHAT IS RELATIONSHIP MARKETING
 Relationship marketing is the process of identifying and establishing, maintaining,
enhancing, and, when necessary, terminating relationships with customers and other
stakeholders, at a profit, so that the objectives of all parties involved are met, where this is
done by a mutual giving and fulfilment of promises.
 Relationship marketing is about forming long-term relationships with customers. Rather
than trying to encourage a one-time sale, relationship marketing tries to foster customer
loyalty by providing exemplary products and services.
  This is different from most normal advertising practices that focus on a single transaction.
Relationship marketing, by contrast, is usually not linked to a single product or offer. It
involves a company refining the way they do business in order to maximize the value of that
relationship for the customer
 It involves:
o Improvement of internal operations
o Incorporating technology
o Social media sites
o Branding
5.2 BENEFITS OF RELATIONSHIP MARKETING

 word of mouth
 long-term retention of the customer
 rise in the price of a product won’t have a much effect on customer purchase
 feedback
 a competitive edge over the other competitors

5.3 HOW TO ACHIEVE:

 Honest and keep an open line of communication

 Maintains a proper feedback channel
 Provides efficient service support
 Interacts with customers online via social media.
 Monitors the image of the brand online and respond accordingly.

5.4 TYPES OF CUSTOMER

UNIT 6: CUSTOMER LIFE CYCLE

6.1 WHAT IS THE CUSTOMER LIE CYCLE

 The customer lifecycle can help your business maximize the revenue potential for each
client who makes a purchase. Once a customer has become a brand advocate, the
potential for upselling increases as a result. New product features, releases or exclusive
offers are also a great way to progress consumers through the lifecycle. As long as your
 messaging is consistent, relevant and is in tune with their needs, you can turn one-time
buyers into loyal customers quickly.

6.2 PHASES OF CUSTOMER LIFE CYCLE

 REACH: Your marketing material and content needs to be in places where consumers will
find it. Reach is the first step in the lifecycle because it develops awareness right away.
 ACQUIRE: Ecommerce acquisition is very important. Reaching potential customers won't
mean much if you can't offer relevant content or messaging. Understanding your brand, the
products you offer and what type of person will buy them will help with the acquisition.
Contacting them directly with personalized communication improves the odds of a future
conversion.
 DEVELOP/NURTURE: Once that first purchase is made, your business needs to keep in
contact with the customer. This is where you develop a relationship with the buyer, ensuring
they're fully satisfied with their initial transaction. You can also use back-end analytics to
predict what else they may like based on what they bought the first time around. Asking for
feedback also helps develop the relationship; customers like that their opinion is valued.
 RETENTION: If you're able to continually send relevant and meaningful messaging to a
customer, the chances that they return and make another purchase are higher. Retention
begins with satisfying a consumer's needs, caring for them and cultivating the relationship.
If you can take a customer's feedback and use it to improve a product or service, you make
them feel as if they were a part of the process. Performing a customer feedback analysis is
key in finding actionable insights that can lead to a stronger customer relationship. This type
of trust is valuable to customer retention.
 ADVOCACY: Once the retention stage of the lifecycle is reached, you want these customers
to become a brand advocate for your business. If they are truly satisfied, they likely won't
have issues recommending your products or services to friends and family. Spreading
awareness amongst social circles is easy to do once a customer is loyal to a brand, and if
they continually spread positive recommendations, their extended network is more likely
to convert as well.

6.3 E-COMMERCE LIFECYCLE MANAGEMENT

6.4 THE EXAMPLES OF TOOLS WE CAN USE

6.5 MANAGING CUSTOMER LIFECYCLE

 Even with carefully targeted and well-developed and implemented customer retention
plans, customers still need replacing.
UNIT 7: MANAGING CUSTOMER LIFE CYCLE- REACH
 The first stage in the customer life cycle is the awareness phase also called the Reach phase.
This is the point where a consumer first becomes aware of your business offerings.
 A customer may find your business in many ways. For example, they may use a search
engine (SEO) like Google and come across your business in the search results. Other
common means of discovery are for the consumer to see an advertisement for your
business or get a referral through word of mouth or social media.
 All customers start in the awareness stage. They must learn about your business before
they can engage with you, so it is typically considered the most important phase in the
customer life cycle.

7.1 MAXIMIZING AWARENESS

 Collect data: When you’re building an acquisition strategy for the first time, you don’t know
which tactics will ultimately work best to raise awareness and bring customers into your
sales funnel. Therefore, set up a means to capture data that you can analyze to help you
zero in on the tactics that ultimately work best.
 Use different tactics: Try a variety of methods to acquire customers. Test different tactics
one at a time until you have a body of data that helps you identify the ones that work best
in terms of meeting your objectives. For instance, perhaps advertising on Facebook works
better at delivering customers than SEO. You won’t know unless you try various methods,
so keep an open mind and be willing to spend even a modest amount of your budget on
different tactics.

7.2 SOURCES OF BUSINESS-TO-BUSINESS LEADS GENERATION

 Leads come from a variety of sources. Many companies turn to satisfied customers for
personal referrals. Customer satisfaction scores enable companies to identify which current
customers to approach for referrals. They may be prepared to write an email of
introduction, provide a testimonial or receive a call to verify the credentials of a
salesperson.

 We discuss four main online sources of leads:

 1. search engines,
2. company websites,
3. portals
4. social media.
SOURCES OF BUSINESS-TO-CUTOMER LEADS GENERATION STRATEGIES
1. Connect Your Email Marketing and Social Channels - Social media and email have the ability
to reach a large audience or customer base with relevant messaging that appeals to user
interests. Work on connecting these two ecosystems to ensure that regular visitors to your
site are following you on social media (and vice versa).
 Make sure to include social channel buttons on your newsletter and email
communications and/or run ads for your newsletter on social channels. Get creative and
try running a social media contest that engages visitors and increases followers!
2. Focus on Content Marketing and SEO
 When it comes to generating some great new leads in an over-saturated consumer market,
having a water-tight content strategy is the key to success. Any content you create—
whether it’s email marketing, social posts, blog articles-—needs to be of the highest-quality
to really help accelerate your lead gen strategy.
 Be sure to incorporate SEO into your strategy to make sure your content is surfacing on top
Google search results pages for increased visibility. Perform keyword research to
understand what your customers and target audience are looking for, and build out content
topics from there. These keywords should be present in the title and throughout the body
of the article (when appropriate), and content should be organized into sections with
headers for better indexing.

3. Invest In Your Website

 To ensure your brand stays relevant and engages the modern consumer, your website needs
to be optimized to create a seamless customer journey. Remember to design with the user
in mind.
 Consumer behavior has shifted dramatically in recent years with the growing advancement
of digital platforms. People are increasingly reliant on their smartphones to research
products (at home and in-store) and expect to have the same quality experience as they
would on a desktop or tablet. Fast loading times (across devices) and a responsive website
are necessities for B2C lead gen.

In fact, according to Think With Google, once web pages take more than 3 seconds to load, the
bounce rate spikes dramatically.

4. Cross-Channel Paid Adverts

 Cross-channel advertising is when a company runs paid advertisements that appear across
channels and on various devices (you’ve likely seen paid adverts from companies on social
media, search results pages, and even on third-party sites).

4.1 Advertising: is used as a prime method for generating new customers in B2C environments.
Advertising can be successful at achieving two different classes of communication objective:
cognitive and affective. Cognition is concerned with what audiences know; affect is concerned
with what they feel. Cognitive advertising objectives include: raising awareness, developing
understanding and generating knowledge. New customers generally need to be made aware of
the product and to understand what benefits it can deliver prior to purchase. Affective
advertising objectives include developing a liking for the product and generating preference.

4.2 Sales Promotion

Sales promotions offer temporary and immediate inducement to buy a product. They are not
part of the normal value proposition. There are many forms of consumer sales promotion,
including the following examples:

Sampling, Discount, Coupons, Rebates and Cash Backs, Bonus Packs, Banded Packs, Free
Premiums, Cross Promotion, Lotteries, Competitions

4.3 Buzz or word-of-mouth

 Word-of-mouth is interpersonal communication about a product or organization in which

the receiver assumes the communicator to be independent of commercial influence.
 WOM has been shown to influence receivers’ knowledge, emotions, intentions and
behaviors, and because of its apparent separation from commercial influence is regarded
as independent and trustworthy. Marketers can promote WOM by identifying and
sponsoring opinion formers such as radio show hosts or bloggers. Giving people something
to talk about is a high priority for buzz marketers – this includes ads, slogans and product
innovations that are high in conversational value and capture people’s attention and
interest.
 An example is Budweiser’s use of ‘Whassup?’ in its TV commercials – the expression caught
on in everyday communication.

4.4 Merchandising

 Merchandising is designed to influence behavior in-store or at other points-of-sale such as

restaurants, banks or gas stations. Merchandisers have available a large number of
techniques. These include retail floor plans, shelf-space positioning, special displays,
window displays and point-of-sale print. Some forms of merchandising are particularly
useful for generating new customers, for example, money-off signs, ‘as used by’ and ‘as
advertised’ signs. The related item displays place two or more related items together, for
example, toppings next to icecream or dressings next to salads. Sales of one category assist
sales of the other. Eye-level positions on shelves are generally more productive than ‘reach’
or ‘stoop’ positions. If merchandisers can position new products in these preferred positions
sales will be positively influenced.

4.5 Product Placement and Product Integration

 Recent innovations in new customer acquisition tactics are product placement and product
integration.
 Product placement involves arranging for products to be shown on display or in use in TV,
movies, videogames and webcast productions. There is no explicit promotion of the
 product. It is simply seen in the production. Actors may use the product, or it may be used
as a background prop.
 A particular form of placement is product integration. This occurs where a product is
integral to the storyline. Companies can pay considerable sums for their products to appear
in movies.

7.4 NEW CUSTOMER PROSPECTING

 In CRM prospecting means searching for opportunities that might generate additional
value for the company
 Prospecting is an outcome of the market segmentation and targeting process. Market
segmentation divides a heterogeneous market into homogenous subsets, even down to the
level of the unique customer. Targeting is the process of choosing which market segments,
clusters or individuals to approach with an offer.
UNIT 8: MANAGING CUSTOMER LIFE CYCLE- AQUIRE
In addition to carefully targeting new customers for acquisition, companies need to consider what
offer they will make to the target. Some industries are consistent in their use of entry-level
products for customer acquisition.

8.1 B2B

 Lead qualification processes prioritize leads so that a company can invest its selling and
marketing resources where they generate the best returns. High-value leads are those that
will produce high margins, buy in quantity, have a higher likelihood for repeat sales,
generate high levels of positive word-of-mouth due to customer satisfaction and are
relatively easy to close because they are not committed to current suppliers.
 One of the ways is to answer these questions:
o Does our product or service solve a customer problem?
o What is the time frame for the prospect’s purchase decision?
o Does the prospect have the authority to buy?
 CRM software applications allow prospects to be scored against these and other relevant
criteria. Higher ranked prospects are then allocated to salespeople.
 Successful lead management programmes are supported by analytics. Sales managers want
to know which lead generation programmes generate high conversion rates and/or high
revenues, which leads are costly to convert, and which territories and account teams have
the greatest success at lead generation and conversion.

8.2 B2C

 The consumer has discovered your business and is now collecting information to weigh the
pros and cons of your offerings. Sometimes, this assessment is against your competition.

 Other times, the consumers are contemplating how well your solutions fit their needs
whether that be their budget, the outcomes they’re looking for by using your offerings, or
other factors like ease of use.
  Consumers will use the information on your website as the primary means of determining
whether or not to buy. They will also examine consumer review sites, social media, or even
call your business to collect answers they cannot get otherwise.

 It’s at this stage that a consumer might enter your sales funnel as a prospect or lead.
 To encourage that, your business website should be set up to engage with the customer in
a genuine way so that they don’t feel sales pressure. The website should also make it easy
for consumers to provide contact info in order to enter your sales funnel.
 It’s also a good idea to use a marketing campaign to tip consumers in the consideration
stage into the purchase stage.
 At this point in the customer life cycle, be sure you’re using an integrated
marketing campaign so that the outreach doesn't become disjointed given that the
consumer is already aware of your company.

8.3 MAXIMIZING CONSIDERATION:

 Leverage a CRM: CRM software is key to the success of a business, particularly at this and
the post-purchase phases. The reasons are many, including a CRM’s ability to inject
personalized messaging at scale. A CRM also tracks customer interactions with your
business and helps you segment consumers into the various stages of the customer life
cycle, making it easier for you to track where each customer is at, and to engage them
accordingly.

 Provide access to information: Provide the information on your website necessary to

help customers make decisions about your products or services. Post case studies or
customer testimonials on the site. Also, make sure your website design is laid out to
facilitate a smooth, engaging experience. One way of doing this is to leverage a content
management system (CMS) to build your website, or if your site is already in place, to create
landing pages that tie into the tactics you used in the awareness phase. In this way, the
landing page can speak to the customer in a more specific manner. For instance, if
customers arrive through search engines using the keyword "best dentist," provide a
landing page with information on your credentials and any awards or high customer ratings
you may have received on sites like Google Maps and Yelp as well as the factors that
differentiate your dentistry from competitors.

 Offer a carrot: To help move customers from the consideration phase to purchase, give
them some type of benefit for entering your sales funnel. For instance, offer a discount on
their first purchase if they sign up for your newsletter or provide you with contact info.

 When the lead becomes a customer and decides to make a purchase, it’s your time to
impress with awesome customer service. Have new and fun ways to keep the customers
engaged and interested in your business. You could organize live events (e.g., webinars)
and invite them or offer them free products that add value to your core product.

UNIT 9: MANAGING CUSTOMER LIFE CYCLE- DEVELOP

 Once that first purchase is made, your business needs to keep in contact with the
customer.
  This is where you develop a relationship with the buyer, ensuring they're fully satisfied
with their initial transaction.
 You can also use back-end analytics to predict what else they may like based on what
they bought the first time around (means the server, application and database that
work behind the scenes to deliver information to the user).
 Asking for feedback also helps develop the relationship; customers like that their
opinion is valued.

9.1 CUSTOMER EQUITY

• Companies should manage customer equity carefully. They should view customers as assets
that need to be managed and maximised. But not all customers, not even all loyal
customers, are good investments. Surprisingly, some loyal customers can be unprofitable,
and some disloyal customers can be profitable. Which customers should the company
acquire and retain? The company can classify customers according to their potential
profitability and manage its relationships with them accordingly. We mentioned this process
before so here only well-known picture by Kotler and et.

9.2 PRACTICAL TIPS

 Be Professional – Service Skills That Matters a Lot: While you deal with your customers,
do not provide false commitments and be professional while you talk. When the
customers look at your professional attitude they will automatically attract to your
brand and products.
 Make Use of Social Media – “Social Care” Not a New Concept
o When you start engaging with your customers through social media you will see
lots of improvement. There are different ways social media can help to build
customer loyalty-
o You can easily find out where your customers spend their time and which
products and services they talk about.
o It helps you to develop an engagement plan.
o Share best and engaging content with your customers.
  Respond to Customer Reviews – Keep Them Happy with Your Response
o Responding to a positive review creates a unique and personal communication
link with a customer who has already demonstrated a proclivity for brand-
advocacy. An immediate response always triggers an emotional connection
which becomes ground in building loyalty and repeat business opportunities.
o Benefits with a positive response-
o Businesses can exponentially increase the possibility of being found based on
keyword searches.
o Positive and instant response promotes your brand. After all good branding is
all about consistent delivery of excellent experiences across all customers.
o Positive review spurs review velocity.
 Educate your Customers – Not Advertising or Marketing
o Customer education is one of the most powerful ways to boost your sales and
build customer loyalty with trust. When more technologically sophisticated and
innovative products come into the market then they leave customers scratching
their heads. The simple fact is that whenever new product or service is
launched, it requires new knowledge and skills as well. If customers are not
aware of the benefits of the product or service, they won’t be able to recognize
its full worth.
 Offer Real-time Experience – Meaningful Relationship with Digital Experience
o Try to deal with your customers in real-time. For example, the options of live
chats on websites and social media accounts help to generate more leads and
improve customer loyalty with satisfaction. Different features in Live Chat like
video and voice call, co-browsing, screen sharing etc. helps in attracting
prospective customers and increase the ability to grow your business
UNIT 10: MANAGING CUSTOMER LIFE CYCLE- RETENTION
 A customer retention strategy aims to keep a high proportion of valuable customers by
reducing customer defections (churn), and a customer development strategy aims to
increase the value of those retained customers to the company.
 Just as customer acquisition is focused on particular prospects, retention and
development also focus on particular customers. Focus is necessary because not all
customers are worth retaining and not all customers have the potential for
development. We will deal with the issue of retention first, before turning to
development.

10.1 WHAT IS CUSTOMER RETENTION?

 Customer retention is the maintenance of continuous trading relationships with customers

over the long term. Customer retention is the mirror image of customer defection or churn.
High retention is equivalent to low defection.

OR IS ALSO

 Customer retention is the number of customers doing business with a firm at the end of
a financial year expressed as a percentage of those who were active customers at the
beginning of the year.
10.2 STRATEGIES FOR CUSTOMER RETENTION

 Customer retention strategy is defined as the ideas that an organization should implement
to keep their customers stay with their brand.
 The key goal behind having a successful client retention plan is to help businesses to retain
customers and how they contribute to the growth of the business.
 Customer retention process always begins with the first contact a customer has with your
business and continues throughout the lifetime of the relationship.

10.3 NEGATIVE CUSTOMER RETENTION STRATEGIES

 Negative customer retention strategies impose high switching costs on customers,

discouraging their defection.
 Creating exit barriers (penalties)
 Enforcing the contact
 Extract switching penalties

The danger for CRM practitioners is that negative customer retention strategies produce customers
who feel trapped.

10.4 POSITIVE CUSTOMER RETENTION STRATEGIES

Customer delight

 Delighting customers, or exceeding customer expectations, means going beyond what

would normally satisfy the customer. It does mean being aware of what it usually takes
to satisfy the customer and what it might take to delight or pleasantly surprise the
customer. You cannot consciously delight the customer if you do not understand the
customer’s expectations. You may stumble onto attributes of your performance that do
delight the customer but you cannot consistently expect to do so unless you have deep
customer insight. Consistent efforts to delight customers show your commitment to the
relationship. Commitment builds trust. Trust leads to relationship longevity. Customer
delight occurs when the customer’s perception of their experience of doing business
with you exceeds their expectation. In formulaic terms: CD = P > E

where CD = Customer Delight, P = Perception of performance, and E = Expectation

 Customers have expectations of many attributes, for example product quality, service
responsiveness, price stability, and the physical appearance of your people and vehicles.
These are unlikely to be equally important.
 It is critical to meet customer expectations on attributes that are important to the
customer. Online customers, for example, look for rapid and accurate order fulfilment,
good price, high levels of customer service and website function - ality. Online retailers
must meet these basic requirements.

10.5 ADD CUSTOMER-PERCEIVED VALUE

1. Loyalty schemes
Loyalty schemes reward customers for their patronage. A loyalty scheme or programme can be
defined as follows: A loyalty scheme is a customer management programme that offers delayed or
immediate incremental rewards to customers for their cumulative patronage.

2. Customer clubs

A customer club is a company-run membership organization that offers a range of value-adding

benefits exclusively to members.

3. Sales promotions

Whereas loyalty schemes and clubs are relatively durable, sales promotions offer only temporary
enhancements to customer-experienced value. Retention-oriented sales promotions encourage
the customer to repeat purchase, so the form they take is different.

4. Build customer engagement

Customer engagement can be thought of as a multidimensional construct composed of four

elements: cognitive engagement, affective engagement, behavioral engagement and social
engagement.

The cognitive and affective elements reflect the experiences and feelings of customers, and the
behavioral and social elements capture brand or organizational participation by consumers, beyond
merely buying the firms’ offerings.

5. Gamification

Gamification is the use of game-like mechanics in non-game contexts.

6. Relational attachment

Customers can become highly attached to a company’s people. An emotional tie may be formed
with an individual person, a workgroup or the generalized company as a whole.

Customers who talk about ‘my banker’ or ‘my mechanic’ or ‘my builder’ are expressing this
attachment.

7. Values-based attachment

Customers may develop a strong sense of emotional attachment when their personal values are
aligned with those of the company. Values can be defined as follows: Values are core beliefs that
transcend context and serve to organize and direct attitudes and behaviours. Customers have many
and varied core beliefs such as sustainability, honesty, child protection, independence, family-
centredness and so on.

Many of these values reflect cultural norms. Where these values coincide with those of an
organization, the customer may develop a strong sense of emotional attachment to the
organization.

A great example in values -attachment is Harley-Davidson

 UNIT 11- MANAGING CUSTOMER LIFE CYCLE-ADVOCACY

Once the retention stage of the lifecycle is reached, you want these customers to become a
brand advocate for your business. If they are truly satisfied, they likely won't have issues
recommending your products or services to friends and family.

11.1 THERE ARE 4 TYPES OF ADVOCATES I CHOOSE FOR OUR NEEDS:

1. Educators. These customers love to share their experiences and swap best practices.
Marketers might tap these customers to share helpful tips, which marketers can then use
to create educational content

2. Validators. These customers like giving feedback and offering suggestions about new
features or capabilities. They value being part of your customer advisory and receiving
insider treatment, such as getting an exclusive sneak preview of new products. Offer these
customers ways to communicate with others to show how they benefit from choosing your
solution. In exchange for exclusive access to new offerings, for instance, they may be willing
to write reviews or be featured in case studies.

3. Status seekers. This group is ambitious and influential — they want to grow their personal
as well as their company’s brand. Marketers can engage these customers by giving them
the spotlight. For example, by encouraging a select group of customers to lead forums,
provide peer-to-peer coaching, and even give courses to other customers in exchange for
discounts, access to special events, and other perks.

4. Collaborators. This advocate group is typically the fewest in number. Executives tend to
over-index on this personality. These customers appreciate opportunities to test strategies
and explore new ideas. They will also invest in your success using their clout and resources.
Inviting your most trusted collaborators to give feedback on future directions or potential
investments can be invaluable.

11.2 TEN IDEAS TO SHOW APPRECIATION IN YOUR CUSTOMER ADVOCACY PROGRAM

1. Give recognition in the form of leaderboards and shout outs on social networking sites.
2. Provide early access to new products and invite their feedback.
3. Give them a t-shirt or other wearable promotion that displays your brand.
4. Invite them to an exclusive event to meet your team
5. Create unique graphics badges that advocates can use on their blog or in social media
6. Encourage advocates to promote your company or product by asking them to post a
photo on social media. Then re-post or retweet customer social media posts to show
thanks and give recognition.
7. Involve advocates to coming up with ideas for new products and give them credit when
you use their approach. Yes even if you already had planned on doing it anyway.
8. Ask for help to improve the way you do business. You might uncover issues you did not
know about that are hurting your brand.
9. Have an essay or art contest. Publish the creative works and results on your website and
social media.
 10. Give thanks and show appreciation back for every effort your advocates make. Respond
professionally and in a positive way to every comment

UNIT 12: TERMINATION OF THE RELATIONSHIP- CUSTOMER DIVESTMENT

The reality is that not all customers are created equal, and businesses should not be wasting time
and money trying to please unprofitable customers. Instead, businesses should segment their
accounts based on profitability and lifetime value, and marketing resources should be allocated
proportionally to this value. In the case of unprofitable customers, this means that very little of your
time and effort should be spent servicing them. Oftentimes, these customers should even be
gracefully removed from your roster because they are costing you money.

Revenue and profit are not the same

 By removing the distraction of unprofitable customers, you will free up more of your time
to focus on profitable accounts with the greatest possibility for growth. By investing more
time on these high-value customers, you will be able to maximize profits. You will also
increase their loyalty to your company, which will lead to high returns in the long term as
those key accounts continue to grow.
 Wondering where to start? Go through your customer database to calculate your profit
margin on each account, in order to determine which clients are losing you money. Your
margin will be low on small accounts where you invest substantial amounts of time.
However, it could also be low on large accounts where price cuts or time invested may still
outweigh revenue.

12.1 REASONS WHY CUSTOMERS BECOME UNPROFITABLE

 A once profitable, low-maintenance customer has cut spending with you due to a customer
service error on your part. In this case, it may be preferable to invest in rebuilding the
relationship rather than cutting the business loose.
 A low-margin customer continues to call your sales representatives daily, even after
receiving special product training. This account is unlikely to ever be profitable and is not
worth taking the time to renegotiate a new contract.

12.2 CONSIDERATION ABOUT THE CUSTOMER DIVESTMENT

12.3 THE ART OF DIVESTING CUSTOMERS WITH DIGNITY

  To divest your company of unprofitable customers, you must have both the courage and
skill to do so without tarnishing your reputation. Instead of sending a form letter or a brief
email to these customers, you should discuss the divestment in person or over the phone,
and work with them to find another partner to service their needs.

12.4 ENSURING A SMOOTH AND AMICABLE TRANSITION

 Once the decision has been communicated, work with the customer to establish mutually
agreed-upon schedules and benchmarks for divestment. You should help make the
transition as smooth as possible for them, in order to minimize bad feelings. One way to do
this is to negotiate with a partner or competitor who might be able to take on the client.
Whether or not you facilitate the move in its entirety, you should at least provide divested
clients with a list of alternative providers. By making the client feel informed and involved
in the transition, you will maximize the success of the divestment.
 By divesting low-value customers, you will be able to spend the right amount of time,
money, and resources on acquiring and keeping high-value customers. The data amassed
on which clients are the most profitable should also be used to help marketing and sales
staff to target the right new customers. After redefining the demographics and purchase
behavior preferences of your ideal customers through this data, you will be able to
concentrate your customer acquisition efforts on high-value prospects and minimize the
need for divestment in the future. In the long run, the divestment process will result in
higher returns from all marketing investments.