Customer Relationship Management Overview

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Questions and Answers

What is the projected growth rate for global e-commerce sales in 2024?

10% year-over-year

14% year-over-year (correct)

12% year-over-year

16% year-over-year

Which category accounts for nearly 25% of online sales?

Electronics

Home goods

Fashion

Media products (correct)

What is the primary focus of transaction marketing compared to relationship marketing?

Maintaining short term sales goals (correct)

Building long-term customer loyalty

Creating a sustainable brand image

Establishing interactive customer engagement

How does customer sensitivity to price differ between transaction and relationship marketing?

More sensitive in transaction marketing Signup and view all the answers

What type of customer feedback system is characteristic of relationship marketing?

Real-time customer feedback system Signup and view all the answers

Which of the following is NOT typically associated with relationship marketing?

Heavy reliance on discounts Signup and view all the answers

What does CRM stand for in the context of managing customer relationships?

Customer Relationship Management Signup and view all the answers

What is a key benefit of implementing CRM systems?

Enhanced management of customer interactions Signup and view all the answers

What is a key aspect of effective customer relationship management?

Adapting to customer needs. Signup and view all the answers

Which of the following questions is relevant for identifying loyal customers?

Who are my most loyal customers? Signup and view all the answers

How should organizations view their customer base according to CRM principles?

As strategically significant customers. Signup and view all the answers

What is essential for understanding the effectiveness of marketing efforts?

Customer feedback and satisfaction. Signup and view all the answers

What should organizations assess to enhance customer relationships?

Customer needs and satisfaction through market research. Signup and view all the answers

Which is a method to determine a customer's future needs?

Analyzing past buying patterns. Signup and view all the answers

To retain customers, which action is critical?

Identifying which customers are at risk of leaving. Signup and view all the answers

Why is it important to match products and services to the right channels?

To ensure effective customer engagement. Signup and view all the answers

What is a primary offensive reason for adopting CRM?

To improve profitability Signup and view all the answers

Which defensive reason might drive a company to implement CRM?

Fear of losing customers to better competitors Signup and view all the answers

What percentage of customers represented only 2% of sales in the customer portfolio analysis at TESCO?

25% Signup and view all the answers

What key factor contributes to customer loyalty in the context of CRM?

Perceived value received from the supplier Signup and view all the answers

What is important for a business according to the customer strategy outlined for Amazon.co.uk?

To continuously remind customers of their relationship Signup and view all the answers

What potential effect of poor customer service can CRM help mitigate?

Bad word of mouth Signup and view all the answers

How does CRM contribute to creating value for both customers and companies?

By enhancing customer service Signup and view all the answers

Which of the following questions is NOT related to understanding customer relationships?

What discounts do competitors offer? Signup and view all the answers

What characterizes ‘schizophrenic’ marketing as described in the content?

Fragmented data leading to off-target communications Signup and view all the answers

Which outcome is associated with increased customer loyalty?

Higher repurchase rates Signup and view all the answers

What fraction of the top 5% of customers was responsible for 20% of sales according to TESCO’s findings?

1/5 Signup and view all the answers

What does creating good word of mouth typically lead to in business?

New customer acquisition Signup and view all the answers

What is true about customer loyalty in dynamic business environments?

It requires ongoing value creation to be maintained Signup and view all the answers

Which of the following best describes the goal of CRM analytics in understanding customers?

To detect patterns and decode strands of information Signup and view all the answers

How can service costs be reduced without sacrificing quality of service according to the content?

By improving service procedures Signup and view all the answers

What does the content suggest as a way to gain insights from customer relationships?

Using analytical intelligence to create meaningful offers Signup and view all the answers

What is a key reason for building relationships with customers?

It can provide significant value for services. Signup and view all the answers

Which condition does NOT indicate a strategically significant customer?

Customers who do not engage with the service. Signup and view all the answers

What technology is primarily utilized in CRM?

Database and data mining technologies. Signup and view all the answers

How does CRM increase customer satisfaction?

By ensuring customers receive exactly what they want. Signup and view all the answers

What is one benefit of implementing an effective CRM system?

A growth in customer base. Signup and view all the answers

Which issue should be addressed when implementing CRM?

Conducting a strategic review of the organization’s position. Signup and view all the answers

What is NOT a benefit of CRM?

Reducing customer engagement levels. Signup and view all the answers

Which of the following best describes a customer with a high life-time value?

A customer likely to use the service repeatedly over time. Signup and view all the answers

What is an essential question regarding the future of a business?

How will the core business evolve? Signup and view all the answers

Which form of CRM is suitable for both current and future business needs?

Analytical CRM Signup and view all the answers

What is a critical factor in determining IT infrastructure needs?

Future organizational requirements Signup and view all the answers

Which aspect is NOT typically considered when choosing vendors and partners?

Personal relationship history Signup and view all the answers

What is a common reason for interacting with companies through social media?

To feel a part of a community Signup and view all the answers

Which social media platform is primarily focused on professional networking?

LinkedIn Signup and view all the answers

Which of the following is a potential interactive activity with companies via social media?

Providing feedback on products Signup and view all the answers

What was the first form of recorded human communication?

Cuneiform script Signup and view all the answers

Study Notes

Managing Operations in the Digital Enterprise (BUSI1061)

Course Focus: Customer relationship management (CRM) and social media in buying products/services today.
Course Instructor: Dr. Kenny Wong Meng Seng
Course Email: [email protected]

Agenda

B2C E-Commerce: Focuses on Business-to-Consumer e-commerce.
Transactional Marketing to Relational Marketing: Describes the shift from short-term transactions to long-term customer relationships.
Customer Relationship Management (CRM): Explores the concept of CRM as a capability for organizations to improve customer relationships.
Benefits of CRM & Implementing CRM: Details the advantages of using CRM and how to put these systems into place effectively.
Social Media and CRM: Explores the integration of social media into CRM strategies.

B2C E-Commerce

USA's E-commerce Market: Is the most advanced e-commerce market globally.
Global E-commerce Sales Growth: Projected to increase by 14% annually, reaching $6.3 trillion in 2024.
Key Driving Factors: Increasing adoption of online shopping, advancements in payment technologies, and increased internet access globally.
Dominant Consumer Spending Categories: Travel, books, and computer hardware and software.
Media Products' Online Sales Share: Account for almost 25% of online sales.

Marketing Paradigm Shift: Transactional Marketing vs. Relational Marketing

Transactional Marketing: Short-term focus on marketing mix. Consumers are more price-sensitive. Uses ad hoc customer surveys.
Relationship Marketing: Long-term focus on interactive marketing; supported by marketing mix activities. Consumers are less price-sensitive. Employs real-time customer feedback systems.

What is CRM?

Improving Organizational Relationships: Improves organizations' relationship with customers by restructuring services around customer needs.
Customer-Oriented Philosophy: Involves analyzing, planning, and controlling customer relationships using modern information and communication technologies.

Types of Benefits

Return on Investment (ROI): Focuses on tangible metrics like profit and cost-benefit analysis.
Return on Relationship (ROR): Centers on intangible benefits, like customer satisfaction and loyalty.

Why Implement CRM

Offensive Reasons: Improve profitability and increase revenue.
Defensive Reasons: Competitive pressure, maintaining customer loyalty, and creating longer-term customer/company value.

Effect of CRM on Revenue

Satisfaction & Repurchase A satisfied customer is more likely to return and repurchase, leading to increased revenue. Positive word-of-mouth.
Losing Potential Customers: Dissatisfied customers might switch brands or leave, resulting in decreased revenue. Negative word-of-mouth.

Customer Loyalty

Consistent Revenue Stream: Loyal customers can be a consistent source of revenue over many years.
Value and Retention: Loyalty hinges on a customer feeling they receive better value from the company than from a competitor.

Case Study: Amazon.co.uk

Customer Strategy: Proactively identifying and fulfilling customer needs, maintaining relationships, and remembering previous visitors.

Customer Portfolio Analysis @ TESCO

Customer Base Examination: Identified that 25% of customers account for only 2% of sales, while the top 5% are responsible for the majority of sales.

How Do Your Customers ‘Experience’ Your Business?

Intelligence-Based Marketing: The company understands its customers' preferences and communicates effectively through pertinent, timely messages using a comprehensive analytical intelligence framework.
Schizophrenic Marketing: The company has a flawed understanding of customer preferences, leading to fragmented and ineffective communication strategies.

Customer Relationships & CRM

Acquiring Customers: Using customer lifestyle data to identify potential customers. Determining qualities of a good customer. Matching customers with appropriate products. Utilizing prospect lists in marketing efforts.
Rewarding Loyal Customers: Identifying and rewarding loyal customers. Differentiating strategies for handling loyal buyers and other customers. Determining suitable levels of personalization for communication strategies to customers.
Retaining Customers: Understanding characteristics of profitable customers, evaluating their risk of leaving, comprehending buying patterns of best customers, strategically utilizing purchasing channels, and efficiently conveying timely and relevant communications with customers.

What does CRM involve?

Customer Focus: Organizations must prioritize customers’ needs and actively address these.
Adaptability: Organizations must be adaptable; adjusting to customer needs and market demands.
Market Research: Conduct comprehensive market research to understand customer preferences and satisfaction levels.

Strategically Significant Customers

Important Customer Segment: CRM focuses on customers that will yield the most value.
Value-Based Decisions: Relationships should be built with customers who provide value.
Resource Prioritization: Avoid relationships with customers who won't yield enough value in the long term.

Markers of Strategically Significant Customers

High Lifetime Value: Customers likely to use the service repeatedly.
Benchmarking: Customers who act as benchmarks for improving service offerings to other customers.
Innovation and Change: Customers who encourage supplier change (e.g., continuous improvement).

Information Technology and CRM

Technological Role: Technology plays a key role in CRM systems.
Data Management: Technology facilitates the collection and storage of customer data.
Personalized Communication: Data allows for individualized customer interactions and services.

Benefits of CRM

Reduced Costs: Achieved through efficient operation and executing the right tasks.
Increased Customer Satisfaction: Meeting customer expectations and exceeding needs of customers.
Growth of Businesses: Increasing customer base and promoting greater opportunities for revenue generation.
Maximization of Opportunities: Leveraging resources to increase services, referrals, and other profits.
Market Insights: Using CRM to gain better insights concerning the market and competitiveness.
Operational Enhancement: Identifying and correcting operational deficiencies.
Long-Term Profitability: Aiming for long-term profitable operations.

Implementing CRM

Strategic Review: Begin implementing CRM with a strategic review of the company's current position.
Core Business Analysis: Defining and adapting the core business to future trends.
Appropriate CRM Model: Choosing the right CRM model for the current and future business needs.
IT Infrastructure: Assessing and acquiring required IT infrastructure to support future organisational needs.
Vendor & Partner Selection: Identifying suitable vendors and partners.

CRM Resources

Various Software and Service Providers: List of relevant companies involved in CRM management.

CRM Helps to Improve Sales?

Importance of Insight into Customers: Successful CRM implementation should be driven by understanding customer needs and fulfilling them.

Media: A Brief History

Chronological Overview: Shows the evolution of media using examples from history.

Definition: Social media is about people exchanging information and ideas in virtual networks through Internet applications.
Web 2.0 Foundation: Social media depends on mobile and web-based technology to communicate interactively.

Examples: Illustrates different social media platforms and how their use cases differ.

List of Social Media Types: Provides some examples of widely used social media forms.

Social Networking Sites: Companies tend to use social networking sites more often than other types of social media.

Reasons Businesses are Following: Customers often seek out discounts, reviews and general information.

Companies' Misperceptions of Why Customers Interact Online

Customer vs. Business Ranking Differences: Shows that companies often underestimate the importance of discounts and certain interactions like discussing products/services.

Considerations to Reinvent Customer Relationships: Suggests key considerations required to create effective social media strategies.
Social Interactions: Highlights the importance of social media in interactions and understanding the customer.
Customer Experience Consistency: Emphasizes the need to make customer experiences uniform across different channels.

Group Formation Instructions: Specific steps and guidelines covering how student groups will form.

MODE Enrollment (as your optional module)

Enrollment Guidelines: A clear set of enrollment instructions, highlighting important considerations including proper scheduling and organizational clearance.

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Description

This quiz explores essential concepts of customer relationship management (CRM), including marketing strategies, customer feedback systems, and the significance of customer loyalty. Test your knowledge on the projected growth of e-commerce and the fundamentals of transactional vs. relational marketing. Perfect for students and professionals interested in enhancing their understanding of CRM principles.