CRM Objectives: Achieve Customer Relationship Goals

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Questions and Answers

What is the primary goal of customer relationship marketing?

To provide financial and social benefits to customers

To reduce the cost of customer retention

To increase customer acquisition

To improve customer satisfaction (correct)

What is the key to retaining customers according to CRM?

Providing financial and social benefits as well as structural ties (correct)

Offering discounts and promotions

Conducting regular customer surveys

Investing heavily in advertising and marketing

What is the purpose of estimating customer lifetime value in CRM?

To determine the cost of customer acquisition

To calculate the ROI of marketing campaigns

To measure customer satisfaction

To decide how much to invest in relationship marketing (correct)

What is the approach to providing customer satisfaction and company profitability in CRM?

Total quality marketing Signup and view all the answers

What is required for companies to offer relatively higher quality than their competitors?

Total management and employee commitment Signup and view all the answers

Who plays a critical role in a company's drive towards higher quality?

Marketers Signup and view all the answers

What is the main advantage of retaining an existing customer compared to winning a new one?

It's 5-10 times less expensive Signup and view all the answers

What is the result of a firm's failure to retain customers?

Disloyal customers can devastate a firm's reputation Signup and view all the answers

What is the goal of a CRM system in terms of customer relationships?

To develop a relationship with each valued customer through effective use of individual account information Signup and view all the answers

Why is customer retention important for marketers?

Because customer loyalty is a key driver of business growth Signup and view all the answers

What is the impact of customer loyalty on a firm's profitability?

Customers are usually more profitable the longer they are retained Signup and view all the answers

What is the benefit of using a CRM system to customize market offerings?

It enables companies to provide excellent real-time customer service Signup and view all the answers

What is the primary reason why marketers focus on retaining existing customers?

Because it costs less to keep a current customer satisfied than to attract a new one Signup and view all the answers

What is the key to successful customer retention?

Providing superior customer value and satisfaction Signup and view all the answers

Why is managing customer relationships important in today's market?

Because of shrinking markets and market shares Signup and view all the answers

How much more does it cost to attract a new customer compared to keeping a current customer satisfied?

Five times Signup and view all the answers

What is the underlying assumption of the production concept in marketing?

That customers will favor products that are available and highly affordable Signup and view all the answers

When is the production concept particularly useful?

When demand for a product exceeds the supply Signup and view all the answers

Study Notes

Managing Customer Demand

Managing demand is done by managing customers, as demand comes from new and repeat customers.
Retaining existing customers is crucial, as it costs five times more to attract a new customer than to keep a current one satisfied.

Marketing Management Philosophies

There are five alternative marketing philosophies that guide organizations in their marketing efforts.
The production concept is one of the oldest philosophies, focusing on improving production and distribution efficiency.
This concept is useful when demand exceeds supply.

Customer Relationship Management (CRM)

CRM is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
The basic goals of CRM include:
- Providing better customer service
- Making call centers more efficient
- Helping sales staff close deals faster
- Simplifying marketing and sales processes
- Discovering new customers
- Providing excellent real-time customer service
CRM is based on customer loyalty, which is crucial for marketers because retaining customers is more cost-effective than acquiring new ones.
Loyal customers provide more credible referrals and are more profitable in the long run.

Customer Retention and Loyalty

Winning a new customer is 5-10 times more costly than retaining an existing customer.
Customers are more profitable the longer they are retained.
Loyal customers provide more credible referrals and can increase the growth potential of each customer.

Total Quality Marketing

Total quality marketing is a major approach to providing customer satisfaction and company profitability.
Companies must understand how their customers perceive quality and how much quality they expect.
Companies must strive to offer relatively higher quality than their competitors.
Marketers play a critical role in their company's drive toward higher quality.

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Description

Test your knowledge of Customer Relationship Management (CRM) and its objectives. Learn how CRM helps businesses improve customer service, sales, and marketing processes. Discover how CRM enables companies to build strong relationships with valued customers.