chap 13

Definition: The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Core Elements:
- Relies on information about customers to create marketing programs resulting in customer satisfaction.
- Requires a culture focused on building relationships with customers at all levels of an organization.
- Customer-centric approach is vital for success.

Building Profitable Relationships:
- Delivering superior customer value and satisfaction relies on three key interactions:
- Customer Acquisition: Attracting new customers.
- Customer Retention: Maintaining relationships with existing customers.
- Customer Reacquisition: Winning back lost customers.

Common Misconceptions: A significant mistake is viewing CRM merely as a software project rather than as an overall company strategy.
Mission Alignment: The customer should be integral to the company’s overarching mission and values.

Listening to Customers: It's crucial for marketers to heed what customers express about the brand.
Consumer Feedback Statistics:
- A study of 3,000 consumers revealed:
- 53% reported being ignored by brands via messaging apps or social media in the last 12 months.
- 89% desire engaging in two-way conversations with brands across social media and messaging channels.

Building Brand Equity: A positive customer experience enhances brand equity, increasing share of wallet and lifetime value.
Customer Experience Types:
- Human Interaction: Engaging sales staff or call centers.
- Interactive Engagement: Utilizing websites, email, and social media platforms.
- Static Marketing: Involving traditional media such as radio or newspaper ads.
Key Touchpoints: Three main points of customer interaction are necessary for crafting experiences that foster loyalty.

Targeting Prospective Customers:
- Analyze profiles of popular customers to acquire similar prospects.
CRM Shift to Retention:
- After customer acquisition, focus on maintaining profitable customer relationships.
- Longer relationships lead to a lower amortized cost of acquisition and promote customer loyalty.
- Advantages of Long-term Customers:
- Less inclined to switch brands.
- More resilient to price changes.
- Likely to initiate word-of-mouth referrals.

Pareto’s Rule:
- 80% of a brand’s sales come from 20% of its customers.
Reward Structures: Heavy users should receive better rewards compared to light users, indicating the importance of caring for the top 20%.
Trust Issues: Less than 50% of Canadians feel loyalty programs are trustworthy, often due to concerns over data privacy and potential spam from marketing calls.
Encouraging Loyalty: A key strategy is to enhance points redemption opportunities and offer discounts and free rewards.

Data Gathering: Companies accumulate, process, and analyze information on customers, potential customers, and competitors over time.
Data Analysis Benefits:
- Helps companies recognize customer needs and allows adjustments to meet and exceed expectations.
Data Mining:
- The process of analyzing customer patterns and insights to facilitate better decision-making.
Data Warehouse:
- A central repository for storing and organizing data.

Customer Loss Consequence: Losing a customer equates to a loss of future purchases.
Common Causes:
- Often results from poor customer service.
Reacquisition Strategy: Identify at-risk customers, engage them to understand issues, and provide corrective actions.

Task Overview:
- Conduct a brief online search for a company you do business with and analyze:
- Customer feedback (positive or negative).
- Use the text-entry function to summarize findings and assess potential improvements needed by the company.

Board of Directors: Required for setting overall strategy within an organization.
Strategic Business Unit (SBU): A fully functioning unit within a larger business entity.

Stakeholders: Individuals or groups affected by the organization’s actions and performance, including employees, owners, customers, and the community.
Mission: The core purpose or reason for an organization's existence, aimed at fostering loyalty among stakeholders.

Types of Goals:
- Profit, sales, market share, quality, customer satisfaction, employee welfare, social responsibility.
Goal Characteristics:
- Goals must be specific, measurable, actionable, realistic, and time-bound (SMART).

Assignment: Use a search engine to find mission statements for organizations like Edwards School of Business, The Broadway Theatre, and Saskatchewan Blue Cross.

Current Condition Analysis: Identifying customers, competencies, and competitors to inform strategic directions.
Situation Analysis: Evaluate capabilities and resources to determine competitive advantages.
Continuous Monitoring: Essential to adapt to competitive changes and refine strategies.

SBU Focus: Evaluate the roles of various SBUs within the larger organizational framework.
Example: Unilever operates at the corporate level, while managing markets for specific products (e.g., Magnum ice cream).
Growth-Share Matrix:
- Axes Definition:
- Vertical: Market growth rate.
- Horizontal: Relative market share (SBU sales compared to the largest firm in the industry).

Ideal Path: Illustrates the transition from start-up to market leader.
Investment Strategy: Transition from Cash Cows to Question Marks/Stars may require reallocating funding derived from previous successes.
Divestment Recommendation: Dogs (low growth, low market share) should be divested to release cash for investment elsewhere.

Growth Opportunities: Assessing products and markets currently engaged or could enter.
Market-Product Strategies: Four alternative strategies for market-product opportunities.

Planning Objective: Develop strategies for increasing market share within the SBU or product line.
Adaptability: The planning process is dynamic and evolves based on feedback and evaluation metrics.