D077: MODULE 5

Customer relationship management (CRM)

Processes implemented by a company to handle its contact with customers with the goal of creating a unified customer experience to maximize retention

Organizations use CRM systems to

capture internal data about customers and customer interactions and house these data in a central location;

provide business users with access to customer data to inform a variety of customer touch points and interactions;

conduct data analysis and generate insights about how to better meet the needs of target segments and individual customers; and

deliver a marketing mix tailored to the needs and interests of these target segments and individual customers

What is customer relationship management (CRM)?

Using processes implemented by a company that enhance customer interaction

What is the purpose of customer relationship management (CRM) software?

Supporting processes by storing information about customers

Which system should be used for a business to develop a customized cosmetics tutorial guide for an individual woman based on the previous feedback?

Customer relationship management

How does a customer relationship management (CRM) system improve services to the customer?

Provides information for targeted marketing and sales purposes

CRM benefits are

operational, analytical, and collaborative

How does a customer relationship management (CRM) system benefit a customer?

Individualizes marketing and sales messages to customers

A clothing store uses a customer relationship management (CRM) system and notices that when one line of the clothing is purchased, customer retention is low.

What is a benefit of CRM for this store?

Customer satisfaction can be improved by tracking buyer behavior.

A manager gives feedback to a team that their core customers were very satisfied.

Which benefit to customer relationship management (CRM) is being used by this manager?

analytical

Which is a benefit that a customer relationship management (CRM) can provide a company?

Providing data to the company across the customer life cycle

The customer life cycle describes the different steps in the organization's relationship with the customer

Reach—getting a prospective customer's attention

Acquisition—bringing a prospective customer into a sphere of influence

Conversion—turning a prospect into a paying customer

Retention—engaging an existing customer to keep them

Loyalty and Advocacy—turning a customer into an advocate for the company

A beverage company purchases advertising to introduce a new line of energy drinks.

Which stage of the customer life cycle does this action illustrate?

Reach

A salesperson for a medical equipment company provides marketing materials for the practice manager at a doctor's office. After three months, the practice manager orders three products.

Which stage of the customer life cycle does this series of actions illustrate?

Conversion

A company sends an email to its customers with a 20% off coupon, if they make a purchase within the next 48 hours.

Which stage of the customer life cycle does this action illustrate?

Retention

An individual clicks on a link to request more information about a product. A salesperson emails the prospect information and pricing and then offers to call with more information.

Which stage of the customer life cycle does this series of actions illustrate?

Acquistion

Companies calculate customer lifetime value using the following information:

average sales revenue per customer,

average profit margin contribution per customer,

average number of sales annually by customer,

number of years and months the average customer remains active,4 and

cost of acquiring a new customer.

A sales manager is reviewing sales reports from the previous quarter and wants to increase sales in the upcoming quarter by focusing on existing customers with a high customer lifetime value.

What is one way to maintain an ongoing relationship with these customers?

Marketing

What should a sales manager use to determine customer lifetime value?

Total profit from all customer purchases

What is considered a less tangible benefit of customer lifetime value?

Loyalty to the brand

What is a benefit of knowing a customer's lifetime value?

Assess profitability of marketing campaigns.

value equity

how the customer assesses the value of the product or service provided by the company

brand equity

how the customer assesses the value of the brand, above its objective value

retention equity

the tendency of the customer to stick with the brand, even when it is priced higher than an otherwise equal product.

What does customer equity measure?

Total combined customer lifetime values

What is a driver for customer equity?

Retention equity

A person has a computer using Platform A. When it comes time to replace the computer, the Platform A computer costs $1,000, while a comparable Platform B computer costs $500. The person chooses to purchase the Platform A computer despite the difference in cost.

Which driver to customer equity does this individual's decision represent?

Retention equity

A customer is choosing either Company A or Company B chocolate chip cookies. Ultimately, the customer chooses the Company A cookies because of his or her preference for that manufacturer's type of product.

Which driver of customer equity does this individual's decision represent?

Brand equity

Which U.S. federal act establishes standards for commercial email?

Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM)

Which action accurately reflects when permission marketing should be used by a manager?

When offering marketing messages to buyers

What is contained in a nondisclosure agreement (NDA)?

The information that is proprietary and how the seller can use that information