Customer Relationship Management and Strategic Marketing Notes

Customer Relationship Management (CRM)

Definition:
- CRM is the process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
- It requires gathering information about customers to develop effective marketing strategies.
Key Aspects:
- Company culture must focus on customer relationships at all levels.
- Emphasis on being customer-centric.
Building Profitable Relationships:
- Achieved through three primary interactions:
- Customer Acquisition: Attracting new customers.
- Customer Retention: Keeping existing customers.
- Customer Reacquisition: Winning back lost customers.

Companies often mistake CRM as just a software project rather than an overall strategy.
Emphasis on integrating the customer into the company's mission and values is crucial.

Listening to Feedback:
- Important for marketers to engage with customer feedback.
- A study found that 53% of consumers felt ignored on messaging apps or social media.
- 89% prefer two-way conversations with brands.

Importance:
- CEM builds brand equity, which increases share of wallet and customer lifetime value.
- Creating positive experiences yields strong customer relationships.
Key Touchpoints:
- Human: Staff interactions (sales, support).
- Interactive: Digital engagement (websites, social media).
- Static: Traditional advertising (radio, print).

Customer Profiles:
- Analyzing profiles helps in identifying potential customers for acquisition.
- Successful retention leads to lower acquisition costs over time.
Long-term Benefits:
- Long-term customers tend to be less price-sensitive and may contribute to word-of-mouth referrals.

Pareto’s Rule:
- 80% of sales come from 20% of customers.
Program Strategy:
- Tailoring rewards for heavy users vs. light users is essential.
- Many loyalty programs lack trust due to privacy concerns, leading to low participation.
Encouraging Loyalty:
- Important to facilitate points redemption and offer discounts or rewards.

Data Collection:
- Companies analyze customer and competitor data to understand needs better.
Data Mining:
- Involves analyzing customer behavior to inform decision-making.
Data Warehouse:
- A central repository where customer data is stored for analysis.

Losing Customers:
- When a customer leaves, it affects future sales.
- Poor customer service is a common reason for customer loss.
Reactivation Strategies:
- Identify at-risk customers, understand their concerns, and proactively address issues.

Levels of Strategy:
- Corporations should have a structured approach to strategy, including defining stakeholder roles and organizational objectives.
Defining Goals:
- Goals should be specific, measurable, actionable, realistic, and time-bound (SMART).

Assessing Current Conditions:
- Identify customers, competencies, and competitors to set strategic goals.
Analysis Techniques:
- Business portfolio analysis and market-product analysis help in evaluating current and future directions for growth.

Growth-Share Matrix:
- Helps evaluate SBUs based on market share and growth rates, indicating whether to invest or divest.

Dynamic Planning:
- Plans should adapt based on evaluation metrics to ensure growth and development within the SBU or product lines.

Understanding Ethics in Marketing:
- Values, morals, and ethics guide decision-making and behavior in marketing practices.
Social Criticisms:
- Common issues include deceptive practices, high-pressure selling, planned obsolescence, and consumer activism.
Consumer Advocacy:
- Organizations like the Consumers' Association of Canada work to protect consumer interests and raise awareness of market issues.

Companies should develop ethical policies governing areas such as advertising, pricing, and customer service to guide behavior and protect consumer rights.