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.

Workplace Culture and CRM

• 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.

CRM and Marketer's Role

• 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.

Customer Experience Management (CEM)

• 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 Acquisition and Retention

• 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.

Loyalty Programs

• 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.

Database Marketing

• 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.

Customer Reacquisition

• 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.

Strategic Marketing Planning

• 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).

Setting Strategic Directions

• 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.

Business Portfolio Analysis

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

Marketing Planning

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

Marketing Ethics

• 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.

Ethical Decision-Making Steps

1. Recognize there’s a problem
2. Gather relevant facts
3. Determine actors involved
4. Test against ethical frameworks (principles, virtues, consequences)
5. Make the decision and reflect on it.

Corporate Marketing Ethics Policies

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