AMITY GLOBAL

BUSINESS SCHOOL

Noida

Customer Relationship Management

Mamta Chawla

AMITY GLOBAL
BUSINESS SCHOOL

Noida

The Marketing Perspective

CAMPAIGN MANAGEMENT
RECENCY FREQUENCY MONETARY VALUE METHOD
CUSTOMER VALUE METRICS

AMITY GLOBAL
BUSINESS SCHOOL

Campaign Management:
The Marketing Perspective

Noida

Developing effective campaigns

Effectively predicting the future
Retaining existing customers
Acquiring new customers

Campaign Management:
The Cap Gemini Model
KNOW

TARGET

Understand market and consumers

needs and preferences

( Offer is developed )
Define market strategies

Exploit customer intelligence,

Use channel integration
Perform segmentation

SERVICE

SELL

Retain customers by:

Acquire customers

Loyalty programs
Communication
Service forces

Use sales force effectively

Develop marketing programs

Campaign Management:
The Marketing Perspective
The marketing manager...

1. Defines objectives
2. Identifies customers
3. Defines communication strategies
4. Designs/improves
products/offers/services/promotions
5. Tests the impacts of her decisions
6. Revises her decisions for maximum effectivenes
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Campaign Management
Step 1: Define Objectives
Targeting
Existing Customers

Creating Loyalty?
Increasing the satisfaction level?

Retention Strategy

Cross-selling or Up-selling?

Targeting
New Customers

Target customers that show

characterstics similar to
existing groups of customers

Acquisition Strategy

Campaign Management
Step 2: Identify Customers
Perform SEGMENTATION
Define the right customers
Use information of past transactions as key for
making predicting future ones
Define the segments and their characteristics
Develop customized marketing strategies for the
different segments

Campaign Management
Step 3: Communication Strategies
Which message should be transmitted?
Which channel should be used?

Campaign Management
Step 4: Design the Products, Offers,
Services and Promotions
Analyze the price, time period, risks, marketing
costs
Define the product / offer / service / promotion and
its general structure
Identify effective use of sales and communication
channels

Campaign Management
Step 5: Test the Impacts
Impacts of the decisions have to be tested and
and assessed on a sample

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Campaign Management
Step 6: Revise the Decisions
Make revisions to the targeted offer / service /
promotions
Finally apply the decisions to the whole
segment or population

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AMITY GLOBAL
BUSINESS SCHOOL

Noida

RFM Method
(Recency, Frequency, Monetary Value )
Recency
When was the last customer interaction?
Frequency
How frequent was the customer in its
interactions with the business?
Monetary value of the interactions

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AMITY GLOBAL
BUSINESS SCHOOL

Noida

Customer Value Metrics

Critical measures used to define customer worth
in knowledge-driven and customer-focused
marketing

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AMITY GLOBAL
BUSINESS SCHOOL

Noida

Customer Value Metrics:

Size of Wallet
J

Size of wallet =

Sj

S
j 1

Sales to focal customer by firm j

Assumption: Firms prefer customers with large

size of wallet in order to retain large revenues
and profits

Customer Value Metrics:

Individual Share of Wallet (SW)
A proportion expressed in terms of percentage,
calculated among buyers
Measured at individual level
A measure of loyalty
Can be used in future predictions
Different from the market share, which also
considers customers with no purchase
Individual share of wallet % =

S j Sales to focal customer by firm j

Sj
J

S
j 1

j
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Customer Value Metrics

Share of wallet and size of wallet should be
analyzed together because...
Size of
Wallet

Share of
Wallet

Purchases

Customer 1 $500

50%

$250

Customer 2 $100

50%

$50

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Customer Value Metrics:

Transition Matrix
Shows expected share of wallet from multiple
brands
Depicts consumers willingness to buy over time
Transition probability from B to A, than from A to
C: 10%*20% = 2%
Brand A

Brand B

Brand C

Brand A
Brand B

60%
10%

30%
80%

20%
15%

Brand C

20%

15%

70%

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