CRM notes

Introduction to the Lecture

  • Instructor: Dr. Amira Mukendi

  • Topic: CRM Marketing Communications in the Digital Age

  • Date: 17.11.2025

  • Location: Strathclyde Business School

Lecture Topics

  • Main Topics:

    • Customer Relationship Management (CRM)

    • Marketing Automation

  • Objectives:

    • Understand the importance of customer relationship management in a digital age.

    • Understand the purposes and implementation of marketing automation.

CRM and Relationship Marketing

  • Key Transition:

    • Movement from transactional marketing to relationship marketing.

  • Definition of CRM:

    • CRM is fundamentally about building long-term relationships with customers.

Transactional Marketing vs. Relationship Marketing

  • Key Differences:

    • Transactional Marketing:

    • Product Focus ➔ Customer Focus

    • Emphasizes transactions over relationships

    • Focus on acquiring customers rather than retaining them

    • Focus on product profitability rather than customer profitability

    • Relies on trial and error rather than testing, measuring, and refining processes

    • Relationship Marketing:

    • Focuses on nurturing customer relationships for long-term engagement

Importance of Customer Relationships

  • Key Principle:

    • The 80/20 principle (Pareto Principle): 80% of a company's revenue comes from 20% of its customers.

Reasons Relationships Matter

  • Higher Costs:

    • Acquiring online customers can cost up to 30% more than acquiring offline customers.

  • Competitive Environment:

    • An evolving landscape requires depth in customer relationships.

  • Evolving Expectations:

    • Customers have higher expectations for communication and rewards systems.

  • E-Word of Mouth:

    • Online recommendations can significantly influence consumer decisions.

Customer Lifetime Value (CLV)

  • Goal:

    • Identify the best customers, how to retain them, and strategies to grow the customer base.

  • Considerations:

    • Customer Lifetime Value (CLV): A projection of how much revenue a customer will generate during their entire relationship with a company.

    • Latency: Time between customer activities affecting engagement and retention strategies.

CRM Systems

  • Components of CRM Systems:

    • Recency: How recently a customer has interacted with the business.

    • Frequency: How often a customer engages with the business.

    • Monetary Value: How much money a customer spends with the business over time.

Understanding CRM

  • CRM Perspectives:

    • CRM as Technology:

    • A technological solution used in the cloud to manage interactions between companies and customers, referred to as a CRM system or solution.

    • CRM as Strategy:

    • A business philosophy for managing relationships with current and potential customers.

    • CRM as Process:

    • The operational system used by companies to nurture and manage customer relationships.

Emergence and Evolution of CRM

  • Historical Context:

    • Emerged in the 1980s and 1990s with advancements in IT and the internet.

  • E-CRM:

    • Emphasizes data warehousing and data mining functionality.

  • Social CRM (CRM 2.0):

    • Incorporates both customer interactions and transactional information.

  • Dynamic Concept:

    • Modern CRM represents a blend of traditional CRM, e-CRM, and social CRM.

Functionality of CRM Systems

  • Core Functions:

    • Organization and management of customer data.

    • Insights into customer behaviors and preferences.

    • Enhancing relationships with effective communication strategies and product targeting.

Applications of E-CRM

  • Benefits:

    • Helps understand customer preferences.

    • Provides consistent communication and efficient processes.

    • User-centric features such as self-service options.

    • Real-time updates on customer behavior.

Integration of E-CRM Systems

  • Common Integrations:

    • Email Service Providers

    • Advertising Systems

    • Customer Service Platforms

    • E-commerce Solutions

Case Study: Salesforce

  • Questions for Discussion:

    1. What aspects of business does CRM connect?

    2. What are its benefits for consumers and brands?

    3. What is the overall purpose of CRM in business operations?

Real-World Examples of CRM

  • Experiences of CRM:

    • Thank you emails post-purchase

    • Requests for reviews and feedback

    • Customer inquiries on social media

    • Loyalty and rewards programs

    • Personalized recommendations via SMS

    • Live chat functionalities across various touchpoints

Data Considerations in CRM

  • Types of Data to Collect:

    • Personal and Profile Data: Basic demographic information and preferences.

    • Transaction Data: History of customer purchases and interactions

    • Communications Data: Interactions across platforms and channels.

    • Web Analytics and Social Media Data: Insights into online behavior and engagement.

CRM System and Data

  • Explicit vs Implicit Data:

    • Explicit Data: Information directly provided by the customer.

    • Implicit Data: Information inferred from customer behavior and interactions.

Benefits of CRM Systems

  • List of Benefits:

    1. Enhanced ability to target profitable customers.

    2. Improved contact management across teams.

    3. Facilitated cross-team collaboration.

    4. Integrated assistance across multiple channels.

    5. Increased productivity and effectiveness.

    6. Improved marketing return on investment (ROI).

    7. Customized products and services based on identified customer needs.

    8. Enhanced customer service efficiency and effectiveness.

    9. Individualized marketing campaigns, especially through email.

    10. Connected customers across all channels via a unified platform.

    11. Increased customer satisfaction and retention.

    12. Accurate sales forecasting capabilities.

Challenges of CRM Implementation

  • Key Issues Leading to CRM Failure:

    • Treating CRM initiatives purely as technology projects (Kale 2004).

    • Implementing CRM before designing customer strategies.

    • Rolling out CRM without necessary organizational changes.

    • Assuming CRM technology alone can enhance performance.

Vodafone CRM Case Study

  • Key Details:

    • Year of Initiative: 2013

    • Goal: Consolidate multiple CRM systems into one for 28.5 million customer accounts.

    • Problems Encountered:

    • Incorrect account migrations

    • Customer billing errors leading to financial losses

    • Weaknesses in existing processes not being addressed before implementation.

Keys to Successful CRM

  • Critical Elements for Success:

    • Training of staff and alignment with strategic objectives.

    • Effective coordination among departments and issue resolution processes.

    • Ongoing maintenance and updates of data accuracy.

Developing a CRM Strategy

  • Steps to Develop CRM Strategy:

    • Identify customers and their details.

    • Differentiate customers based on their needs and value potential.

    • Determine effective interaction strategies to provide value.

    • Explore and utilize technology for relationship customization.

Relationship Building Process

  • Steps to Attract Customers Online:

    1. Encourage user actions through targeted calls to action.

    2. Gather contact information for ongoing engagement.

    3. Maintain dialogue through both online and offline communications.

Ethical Considerations in CRM

  • Discussion Prompt:

    • Are there ethical issues surrounding CRM practices?

  • Dark Side of CRM:

    • Refers to unfair treatment and favoritism that may arise from CRM practices (Frow et al., 2011).

Understanding the Ethical Implications

  • Dark Side Definition:

    • Deliberate practices by service providers in CRM that exploit customers.

    • Difference between intentional harm (dark side) versus unintentional poor management.

    • Potential for negative customer behavior (e.g., “jaycustomers”).

Marketing Automation Overview

  • Introduction:

    • The role of customer interactions is increasingly mediated by technology.

    • Complexity arises from the multitude of communication channels and data availability.

  • Definition:

    • Marketing automation is defined as "the software-based application of processes, rules, and algorithms that execute marketing activities with little or no human intervention" (Buttle & Maklan, 2019).

    • Central concept: Send the right message to the right person at the right time.

Framework of Marketing Automation

  • General Framework (Heimbach et al., 2015):

    • Established categories for marketing automation functionalities.

Functionalities of Marketing Automation

  • Broad Categories:

    1. Journey Facilitation (e.g., lead management)

    2. Content Marketing Processes

    3. Intelligence Processes (customer/prospect insights)

Journey Facilitation Functions

  • Specific Applications:

    • Lead generation and qualification processes.

    • Automated workflows for lead nurturing.

    • Implementing triggers for automated actions in customer journeys.

    • Customer onboarding processes.

Communications and Content Marketing

  • Interconnectedness with Digital Marketing:

    • Marketing automation supports personalized digital content distribution.

    • Facilitates effective communication with prospects and existing customers across various channels.

Insights from Marketing Automation

  • Data Usage:

    • Marketing automation leverages both active and passive data collection.

    • Passive Data: Includes customer clickstream data and past transaction details.

    • Active Data: Involves customer engagement through content interaction (e.g., prompts for additional information).

  • Targeting and Personalization:

    • Leveraging collected data allows for targeted messaging across channels leading to higher engagement.

    • Capacity to track behavioral footprints of customers over time.

Examples of Marketing Automation Solutions

  • Providers and Examples:

    • Email automations, social media scheduling, engagement platforms (e.g., Manychat).

    • Personalized recommendations across digital platforms (e.g., Netflix landing pages).

    • Utilization of chatbots for customer interaction and support.

Benefits of Marketing Automation

  • Core Benefits:

    • Enhanced visibility of the customer journey.

    • Improved understanding of customer preferences and pain points.

    • Streamlining customer experiences to boost engagement.

    • Efficient resource utilization with increased effectiveness and productivity.

    • Facilitating organizational learning and forecasting capabilities.

Potential Drawbacks of Marketing Automation

  • Implementation Challenges:

    • Manual work needed for setting up rules and creating automation objects.

    • Risks concerning loss of control and privacy considerations.

  • Realistic Limitations:

    • Not all tasks can be automated; leadership remains pivotal for effectiveness.

Implementation of Marketing Automation

  • Steps for Successful Implementation:

    • Obtain buy-in from management and project champions.

    • Conduct thorough reviews and update marketing strategies.

    • Identify clear requirements for successful project implementation.

    • Create valuable, timely, customer-centric content.

    • Set realistic expectations for project outcomes and continue investments.

Keys to Success in Marketing Automation

  • Strategic Considerations:

    • Timing and customer-centric strategies are essential for maximizing the value offered by marketing automation.

    • Focus on quality over quantity to avoid overwhelming customers with irrelevant communications.

Automation in Other Service Contexts

  • Notable Applications:

    • Study of service robots and chatbots as prevalent AI applications in marketing context.

    • Distinctions between standardization versus personalized automation at scale.

Examples of Non-Human Interaction Point

  • Specifically Highlighted Examples:

    • Examples like McDonald’s Self Service Kiosk illustrate practical applications of automation.

Summary of Lecture Content

  • Key Topics Covered:

    • Comprehensive discussion of CRM: encompassing definitions, applications, and benefits.

    • Detailed exploration of data types critical for effective CRM.

    • Analysis of CRM strategies including success and common pitfalls.

    • Overview of marketing automation functionalities along with benefits and potential drawbacks.

    • Insights regarding the necessity for thorough implementation strategies in adopting new technology.

    • Recognition of how marketing automation fits into the broader service landscape.

Recommended Readings

  • Textbook Reading:

    • Chaffey, D. (2015). Digital Marketing: Strategy, Implementation and Practice. 6th edn. Harlow: Pearson Education Limited.

  • Further Reading:

    • Järvinen, J. & Taiminen, H. (2016). Harnessing Marketing Automation for B2B Content Marketing. Industrial Marketing Management, 54, pp. 164-175.

    • He, A.Z. & Zhang, Y. (2022). AI-Powered Touch Points in the Customer Journey: A Systematic Literature Review and Research Agenda. Journal of Research in Interactive Marketing, pp. 1-20.

    • Frow, P., Payne, A., Wilkinson, I.F. & Young, L. (2011). Customer Management and CRM: Addressing the Dark Side. Journal of Services Marketing. 25(2), 79-89.

    • Payne, A. & Frow, P. (2005). A Strategic Framework for Customer Relationship Management. Journal of Marketing. 69(4), 167-176.