Customer Relationship Management (MKT 2227) PDF

Customer Relationship Management (MKT 2227) Introduction to CRM & Theoretical Foundation of CRM Maduka Udunuwara Department of Marketing Faculty of Management and Finance University of Colombo ...

Customer Relationship Management (MKT 2227) Introduction to CRM & Theoretical Foundation of CRM Maduka Udunuwara Department of Marketing Faculty of Management and Finance University of Colombo  The evolution of marketing Transactional versus relationship marketing Customer relationship management Customer service Placing customer service in the Lesson relational paradigm outline What is customer service? Why is it important? How to achieve excellent customer service?  Understanding the needs of the customer Creating value for the customer Functional value Experiential value Social/relational value Psychological value  The responsibility of the marketer.. Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders Management of the function of marketing Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.  CRM is a process of What is carefully managing detailed information customer about individual relationship customers and customer “touch points” to management? maximize loyalty (CRM)  Customer- “A party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers” The Classification of Customer customer…. 1. Business Customers 2. End- customers 2024 8 Why CRM is important? 9  A customer’s perception is their reality It is easier to retain customers happy than attracting new The customers importance Complaints spread like wildfire on the internet of the Without customers, we don’t have customer a business Brands win or lose by how well they wow customer 10  Changing technology Changing customer knowledge and preferences Factors Hyper competition Necessitate Globalisation CRM Shorter product life cycles  People- includes both customers and the employees Key factors Process- systems used to contributing deliver the services to CRM Technology- assists both people and process  Initially, the transaction was the main concern of marketing Transactional The main concern of TM was to increase the market growth in terms (TM) versus of customer numbers relationship TM is grounded on the marketing mix marketing The success of TM was threatened by (RM) numerous changes in the environment Therefore, relationship marketing became a better option  TM versus RM Transactional marketing Relationship marketing Focus on single sale Focus on customer relationships Orientation on product features Orientation on product benefits Short-term scale Long-term scale Little emphasis on customer High emphasis on customer service service Limited customer commitment High customer commitment Moderate customer contact High customer contact A paradigm shift  Berry (1983, p. 25) defined RM as “attracting, maintaining and—in multi-service organisations— enhancing customer relationships.” Elaborating further, Berry (1983) indicated five key RM activities: developing a core service, customising the Relationship relationship to individual customers, augmenting the core service with extra benefits, pricing the service to marketing encourage loyalty, and looking after the employees in anticipation that they would do the same for the (RM) customers. Importantly, a company that adopts RM reflects its relationship orientation through maintaining long-term relationships, in addition to the importance placed on satisfying the customer (Choi & Chu, 2001; Wu & Chen, 2012)  CRM is built on the conceptual Relationship foundations of relationship marketing marketing (Battor & Battor, 2010; Reinartz, (RM) versus Krafft, & Hoyer, 2004) customer Due to the common grounds between relationship relationship marketing and CRM they management have been referred to interchangeably (CRM) (Parvatiyar & Sheth, 2000; Parvatiyar & Sheth, 2001). The common elements of CRM and RM The emphasis on one-to-one relationship with customers, an interactive process rather than a transactional process, value added activity with mutual interdependence, and collaboration between the supplier and the customer (Parvatiyar & Sheth, 2001). The differences between CRM and RM Gummesson (2008) stated that relationship marketing is the attitude of the organisation, whereas CRM is the tool used to implement that attitude. As pointed out by Mitussis, O'Malley, and Patterson (2006), while relationship marketing focuses on all parties including suppliers, competitors and intermediaries, CRM exclusively focuses on managing end customer relationships. Consequently, CRM has become a separate field of marketing.  RM RM, CRM and customer service CRM management Customer Service Management  The assistance and advice provided by a company to those people who buy or use its products or services (Oxfordditionaries.com) Customer service is also defined as the degree of assistance and courtesy granted those who patronise a business What is It is considered necessary for services organisations that supply their customer needs and wants Customer service is about meeting or exceeding customer customer expectations Customer service management involves supporting service? customer through the process of selecting, purchasing, and maintaining a product or service can be done by hiring knowledge employees, providing online or telephone support, offering generous return policies or including warranties that guarantee customer satisfaction  Increased revenue and profits Increased efficiency Less waste Importance Improved staff morale and of CRM to confidence an Reduction in staff turnover and organisation absenteeism Saves money  Enables individuals to take responsibility – saves time Increased customer confidence – which leads to more purchases Gives employees a sense of pride in Cont.…… the company – increased motivation Happier shareholders Less bad publicity, more good publicity, which in turn brings in more customers.  Negative service encounters Being passed around People not returning calls Having to chase up all the time People not taking ownership of the problem Obvious insincerity Poor communication of mistakes and problems Being kept waiting Voice mail and music whilst on hold and the telephonist never coming back to you  Cont.…. Staff not knowing enough about who does what Staff making mistakes - again and again Arrogance and complacency Rigid inflexible procedures Staff who couldn't care less/are rude/lacking in product knowledge Not delivering on time! And sadly there are many more…  Discussion Identify some disappointing Identify customer actions in Identify the key factors Identify the key success and delighting customer those circumstances contributed to these factors in CRM experiences experiences