Customer Relationship Management

Rubn Chumpitaz Caceres, PhD IESEG School of Management Francia

Part 1

Agenda
Main topic : Relationship marketing Course objectives Course content Pedagogical tools Documentation Evaluation

Main topic: Relationship marketing

Question: What is transactional marketing ? Answer:

Strategic marketing Operational marketing (4P)

Main topic: Relationship marketing

Question: What is a relationship? Answer:

A relationship is a series of interactive episodes between parties over time but it is also a social and emotional construct

Main topic: Relationship marketing

Question: What is customer relationship management / relationship marketing? Answer:

CRM is the process of continuously developing relations with individual clients in order to identify and create mutual benefits

Main topic: Relationship marketing

A Vision : Crystalization of what the leaders want the organization to become
A Strategy : Plan for how to implement the vision A set of Business Processes: that enable managers to execute strategy A set of Tools provided as support of business processes

Vision

Strategy Business Processes

Tools

Main topic: Relationship marketing

Main topic: Relationship marketing

Main topic: Relationship marketing

Banks

Retailers

Not-for-profits

http://www.acxiom.fr/societe-marketing-direct/Pages/presentation.aspx

Growth of CRM Industry

Approximate Worldwide CRM Investments (applications, hardware, and services)

50
40.0 47.5

60% 50% 40% 30% 20% 10% 0% Year-to-Year Growth

Spendings in $million

40
34.6 29.7

30
23.7 20.0

25.9

20
13.5

10 0

1999

2000

2001

2002

2003

2004

2005

2006

Mean estimates as of 2002 and 2003 across various providers CRM outsourcing services not included
Sources: IDC, Aberdeen, Gartner, Forrester

Spendings Year-to-Year Growth %

Why this Growth?

Why this growth?

Why this Growth?

1. Growing consumer diversity due to demographic and behavioral trends Ageing of the population in developed countries Increased ethnic diversity Increasing individualization

www.gsm-senior.com

Telephones with big touches, orthopaedic shoes, but also magnifying glasses for television screens: the supermarket Kthe and Karl, situated in the town of Grossrschen, in the east of Germany, has nothing of a traditional hypermarket. Its target: the seniors. Indeed, the 65 years and more already represents 20 % of the population. Germany is one of the oldest countries of Europe, just after Italy and by 2050, these consumers should represent a 386 billion euro purchasing power, according to the German Institute of economic studies (DIW). Some companies get ready for it by investing from now on this market. According to a study of DIW published in February, 2007, the consumption spending of 60 years and more on Germany amounts to 316 billion euro

www.lemonde.fr, 10.09.08

Why this Growth?

2. Time scarcity
Average waiting time (in seconds) after which calls are abandoned by customers
60 55
Seconds

55 51.3 45 42.5 1998 1999

50 45 40 35 30 UK Worldwide

Source: : Merchants International Call Center Report

Source: Kumar and Reinartz, 2006, p. 9

Why this Growth?

3. Value consciousness and intolerance for low service levels
90 85 80 75 70 65 60

Scheduled Airlines

90

Household Appliances

90

Commercial Banks
90 85 80 75 70 65

P arcel Delivery
90 85 80 75 70 65

P ersonal Computers
90 85 80 75 70 65

P ublishing/ Newspapers

85

85

80

80

75

75

70

70

65

65

-8.4%
60

-3.5%
60
1994 1996 1998 2000 2002

-2.7%

60

-2.5%
60

-9.0%

60

-12.5%

1994 1996 1998 2000 2002

1994 1996 1998 2000 2002

1994 1996 1998 2000 2002

1994 1996 1998 2000 2002

1994 1996 1998 2000 2002

(American Customer Satisfaction Index) with products and services Source: http://www.theacsi.org, University of Michigan
Source: Kumar and Reinartz, 2006, p. 10

Why this Growth?

4. Information availability and technological aptitude

Customers more knowledgeable in making purchase decisions More comparisons across providers and transactions

Why this Growth?

5. More intense competition between firms

Why this Growth?

6. Diminishing product-quality differentiation

Why this Growth?

7. Better technology, cheaper and larger storage units 8. Increased popularity of data warehouses
9. Multiplication of communication channels focused on the customer

Why this Growth? Consequences

Marketers should be wary of placing heavy time demands on consumers
The major challenge facing companies has become meeting consumer demands rather than cost reduction

Value added to customers by offering customized product and service propositions

Need for better information about customer behavior and attitudes

CRM objectives
We want to thoroughly understand ours customers needs even before they know them themselves Decreasing customer churn by increasing customer satisfaction Motivating customers to initiate revenue generating contacts with us Increasing the likelihood of the right response by a given customer or customer segment

To use technology to improve customer service and enable a greater degree of customer differentiation in order to deliver unique customer interactions
We want to attract customers both old and new through more personalized communications
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Agenda
Main topic : Relationship marketing Course objectives Course content Pedagogical tools Documentation Evaluation

27

Course objectives
develop your knowledge with respect to the concepts and the analytic tools of the relationship marketing apply the concepts and the tools studied in the analysis of real cases of companies or brands
bring you to a detailed and critical reflection on the relationship marketing such as it is applied in various sectors

28

Agenda
Main topic : Relationship marketing Course objectives Course content Pedagogical tools Documentation Evaluation

29

Course content
The relationship strategy (company perspective) Relationship and relationship marketing definitions Business case and success factors Customer lifetime value Customer portfolio management The relational chain (consumer perspective) Perceived quality Customer satisfaction Customer trust Customer loyalty Complain management
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Agenda
Main topic : Relationship marketing Course objectives Course content Pedagogical tools Documentation Evaluation

31

Pedagogical tools

General and interactive courses

Testimonies from marketing experiences coming from different sectors of activity Teamwork

32

Agenda
Main topic : Relationship marketing Course objectives Course content Pedagogical tools Documentation Evaluation

33

Documentation
Angot Jacques, Chumpitaz Ruben et Swaen Valrie (2009), Le marketing scientifique lusage des managers. Tome I : Ltude de la relation client , Die Keur, Bruges, Belgique (available at DUC). Slides and scientific articles given as illustration on ESAN virtual

Agenda
Main topic : Relationship marketing Course objectives Course content Pedagogical tools Documentation Evaluation

35

Evaluation
50% of the final evaluation: written exam Estimate the quality of your knowledge on the subjects taught in the courses, and your capacity to apply concretely concepts taught

30 % of the final evaluation: teamwork by 4 students with cases studies Maximum 5 pages per case, Times New Roman 12, Interline 1.5

20% of the final evaluation: active oral participation

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