CRM Exam 1

What is CRM?

the strategic process of selecting and shaping interactions with customers to optimize their current and future value to a company.

What is the key goal of CRM?

To retain high-value customers, as small increases in retention lead to significant results.

What three factors drive CRM?

Changes in consumers, marketplaces, and technology.

What is customer-centricity?

An organizational mindset that prioritizes understanding and delivering value to customers at every touchpoint.

What are key questions to assess customer-centricity?

Does the company understand customer value? Are processes aligned to maximize value? Do processes ensure continuous improvement?

How are CRM and customer-centricity related?

the process that helps implement customer-centricity and build shareholder value by leveraging customer knowledge across the organization.

What was the focus of First Generation CRM (1990)?

Sales force automation (SFA), customer service, call center management, and order processing.

What was added in Second Generation CRM (1996)?

A unified customer-facing front-end integrating marketing, sales, and service.

What shift happened in Third Generation CRM (2002)?

Integration of customer-facing systems with back-end processes, focusing on revenue growth.

What was the key characteristic of Fourth Generation CRM (2008)?

Agile, flexible CRM adoption by SMEs, with on-demand and self-service solutions.

What defines Fifth Generation CRM (2015)?

Social CRM, leveraging Web 2.0 and real-time social data for engagement.

What is strategic CRM?

A top-down approach integrating CRM across all organizational functions, requiring management commitment.

What does 'strategic' mean in CRM?

It involves all organizational functions, rejecting a silo mentality and viewing CRM as an ongoing process rather than a software project.

What is Key Account Management (KAM)?

A strategy where companies dedicate special resources to their most valuable customers to build long-term relationships.

What are the quantitative criteria for selecting key accounts?

Sales volume, market share, revenue contribution, and profit.

What are the qualitative criteria for selecting key accounts?

Image, reference potential, technological know-how, and interorganizational fit.

What activities add value to key accounts?

Special pricing, product customization, workflow coordination, and exclusive events.

What are the key components of customer-centricity?

Deep customer understanding, tailored products/services, personalization, effective communication, ongoing engagement, customer satisfaction and delight, cross-functional collaboration, customer lifetime value (CLV), adapting to external changes, empathy, data-driven insights.

What is customer value?

Understanding what high-value customers prioritize and maximizing their profitability over their lifetime.

What are the components of customer value?

Customer acquisition, customer retention, customer engagement, customer emotions.

What is Customer Lifetime Value (CLV)?

The total predictable revenue a business can generate from a customer over their lifetime.

How was CLV calculated in the Starbucks case?

By analyzing the average order value, frequency of visits, and length of time as a customer.

How did IBM transition its CRM approach?

Shifted from a development-focused to a customer experience-focused model, integrating agility and customer insights.

What was Rich Products' CRM transformation?

Moved from siloed operations to customer journey mapping with cross-functional teams.

What is Intuit’s 'Design for Delight' strategy?

A focus on intuitive, customer-driven product development.

What is regression analysis used for in CRM?

To determine the impact of different factors on customer retention and profitability.

What does significance in regression output indicate?

Whether a variable meaningfully impacts the outcome.

What does the beta coefficient tell us?

The strength and direction of a variable’s impact on the dependent variable.

What is the null hypothesis in CRM analysis?

That there is no significant relationship between the studied factors and customer behavior.