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Analysing Profitability of Customers: Value Chain Analysis, Customer Defection, Closed Loop Marketing

The document discusses analyzing customer profitability, customer defection, closed loop marketing, and CRM. It defines customer defection and provides reasons for it like pricing, service, and product issues. It also discusses problems in determining defection and ways to avoid it like understanding competition, building trust, improving offerings, and loyalty programs. Closed loop marketing is explained as using analytics to connect marketing efforts to leads, opportunities, and sales. It requires tracking tools and an integrated CRM to close the loop.

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36 views

Analysing Profitability of Customers: Value Chain Analysis, Customer Defection, Closed Loop Marketing

The document discusses analyzing customer profitability, customer defection, closed loop marketing, and CRM. It defines customer defection and provides reasons for it like pricing, service, and product issues. It also discusses problems in determining defection and ways to avoid it like understanding competition, building trust, improving offerings, and loyalty programs. Closed loop marketing is explained as using analytics to connect marketing efforts to leads, opportunities, and sales. It requires tracking tools and an integrated CRM to close the loop.

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© © All Rights Reserved
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Download as PPTX, PDF, TXT or read online on Scribd
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Analysing profitability of

customers
Value chain analysis, Customer defection,
Closed loop marketing
CRM

Presented by: Hemraj


Ishjiv sethi Jai
bharti
Simrat kaur
Customer Defection
Introduction

The customer
“ No. of customers
defection rate is the
who do not repeat
rate at which existing
with a particular firm
customers leave
is termed as
the brand and switch
customer defection.”
over to a competitor.
Introduction Cont.

Other terms used for customer defection are


• Customer Attrition
• Customer Churn
• Customer Turnover
Customer defection can occur due to
• Either customer has stopped using that particular
product completely
• Or the more likely scenario is that the customer has
switched over to a competitor.
Reasons for customer defection

Pricing: Customers are very sensitive to pricing and


any increase in the same can lead to termination of
relationship.

Service: Customers have varied options to choose


from and a slightest dip in service standards will
lead to customers’ defection.

Product: A bad product can lead to customer


dissatisfaction leading to customer defection.
Reasons for customer defection Cont.

Decrease In Brand Value: If the there is a decrease in the brand


value of the organization, then it might lead to customer defection.

Customer Relationship: Weak customer relationship might also


lead to customer defection.

Ease of use: If competitor’s product is easy to use i.e. the


competitor’s product is more easily available and require less no.
of steps to get the things done, then this might also lead to
customer defection.
Problems with determining Customer Defection

Many companies aren’t really alarmed by customer defections—or


they’re alarmed too late—because they don’t understand the
intimate, causal relationship between customer loyalty on the one
hand and cash flow and profits on the other.

It is unpleasant to study failure too closely, and in some companies


trying to analyze failure can even be hazardous to careers.

Customer defection is often hard to define.

Sometimes customer itself is a hard thing to define, at least the


kind of customer it’s worth taking pains to hold onto.
Problems with determining Customer Defection Cont.

It is extremely hard to uncover the real root


causes of a customer defection and extract the
appropriate lessons.

Getting the right people in your organization to


learn those lessons and then commit to acting
on them is a challenge.

It is difficult to conceptualize and set up the


mechanisms that turn the analysis of customer
defections into an ongoing strategic system,
closely supervised by top managers and quickly
responsive to changing circumstances.
Avoiding Customer Defection

Find out reasons for defection

Know your competition: Know who you’re dealing with

Build trust through relationships

Continuously improving your product and services

Leverage customer feedback surveys

Provide loyalty benefits to existing customers


CLM
● Closed loop marketing is the use of analytics and insights to build
better marketing campaigns that lead to ROI.

● To “close the loop”, marketers must track and analyze their efforts from the first
touchpoint all the way through to the customer's interactions with sales.

● Closed loop marketing allows a marketer to connect every lead, opportunity, and
customer to the initial marketing campaign that brought them to the company.
CLM
Process
● In step 1, the visitor searches online for “inbound marketing” and clicks through
to your website. Marketing software tracks the visitors original source so that
future ROI can be credited to that original source.

● In step 2, the visitor finds a call-to-action (CTA) on your website that leads to
your demo offer. This is also tracked using marketing software. After filling out
a form on the demo landing page, the visitor becomes a lead.

● In step 3, sales follows up with the lead, closes the sale and tracks this sale using
a customer relationship management (CRM) platform. With this last interaction,
marketing can now “close the loop” because they are able to track each
touchpoint that led up to the sale.
Tools Needed
● A marketing software to track touchpoints in the marketing funnel.

● A CRM platform that can integrate with the marketing software to close the
loop.

● Both of these systems provide with the data to close the loop.
Importance
● Helps to focus on the channels and campaigns that matter most.

● Minimizes the cost-per-lead

● To shorten the sales cycle

● Helps to learn about target audience

● Lowers cost per acquisition


Summary
● Closed loop marketing starts with the sales team. They analyze customer
behavior and trends.

● Data gathered is focused on what drives customers’ purchasing decisions.

● After data is gathered, it’s then shared with the marketing team.

● The marketing team uses the data to mold and create new marketing strategies
based on consumer trends.
References
● https://techleens.com/mba/tqm/what-is-customer-defection.php
● https://www.marketing91.com/how-to-reduce-customer-defection-and-bring-down-d
efection-rate/
● https://simplicable.com/new/customer-defection
● https://buildfire.com/customer-retention-strategies/
● https://
blog.hubspot.com/blog/tabid/6307/bid/32341/how-closed-loop-marketing-works.aspx
● https://
www.smartbugmedia.com/blog/what-the-heck-is-closed-loop-marketing-why-do-you-
need-it

● https://www.marketing-schools.org/types-of-marketing/closed-loop-marketing/

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