13269039 CRM and Loyalty
-
Upload
khaledkholio -
Category
Documents
-
view
220 -
download
0
Transcript of 13269039 CRM and Loyalty
-
8/9/2019 13269039 CRM and Loyalty
1/27
CRM and LoyaltyCRM and Loyalty
-
8/9/2019 13269039 CRM and Loyalty
2/27
2
ContentsContents
Part 1. Customer Relationship
Part 2. Customer Loyalty
Part 3. Approach to Loyalty Program
Part 4. Loyalty Program case study
Part 5. Summary and Conclusions
Part 6. References
-
8/9/2019 13269039 CRM and Loyalty
3/27
3
Part 1. Customer RelationshipPart 1. Customer Relationship
1. CRM
2. Relationship Marketing
3. CRM and Behaviour Type
-
8/9/2019 13269039 CRM and Loyalty
4/27
4
What is CRM?What is CRM?
What is CRM?
Simply stated, Customer Relationship Management (CRM) is
about finding, getting, and retaining customers.
CRM is at the core of any customer-focused business
strategy and includes the people, processes, and technology
questions associated with marketing, sales, and service. In
today's hyper-competitive world, organizations looking to
implement successful CRM strategies need to focus on a
common view of the customer using integrated information
systems and contact center implementations that allow the
customer to communicate via any desired communication
channel. Lastly, CRM is a core element in any customer-centric
eBusiness strategy.
-
8/9/2019 13269039 CRM and Loyalty
5/27
5
Service/
Product
Satisfaction
dissatisfaction
repurchase
Good wordof mouth
Loyalcustomization
Creating newcustomer
Increaserevenue
Brand switch
Bad wordOf mouth
Losing customer
losing potentialcustomer
Decrease
Revenue
Effect of CRMEffect of CRM
CS Guarantees Companys Revenue?CS Guarantees Companys Revenue?
-
8/9/2019 13269039 CRM and Loyalty
6/27
6
CM
(CustomerManagement)
Products
ControlResultSecret
Sales Volume
Departure
Route
Destination
Customers
CommunicationContinuityPublic
Loyalty
Acknowledgement about Relationship
CRM
(Customer
Relationship
Management)
CRM and Customer LoyaltyCRM and Customer Loyalty
There is always the risk that a customer will defect when a competitor offers better
value or a wider range of value added options. -> Loyalty Programs must motivate loyal
buyers to repurchase.
-
8/9/2019 13269039 CRM and Loyalty
7/27
7
Relationship MarketingRelationship Marketing
Relationship Marketing
Focuses on getting and keeping customers
Concerned with customer loyalty
Aimed at developing long-term, cost-effective links between an
organization and its customers
All customer relationships are worth keeping
Customer retention
Impact on profitability and past research has claimed that it can be 5 times
more expensive to obtain a new customer.
The Pareto rule
Profit in business comes from repeat customers, customers that boast about your
product and service, and that bring friends with them ( cited in Lowernstein, 1995)
-
8/9/2019 13269039 CRM and Loyalty
8/27
8
Customer satisfaction and Behaviour typeCustomer satisfaction and Behaviour type
1 2 3 4 5
Strong dissatisfaction so so Strong satisfactio
Possibility ofLoyalist
(expectation high visit rates customer
Not a customer who owns a large car
high income customers
Jeep or compact car owners
A driver who has a car below 3 year
Relationship marketing
New display design Offer resting place with free coffee, snacksBuilding Personal relationshipIncreasing staffs at peak time for saving customer waiting timeDiscount scheme(Offering free washing coupon)
Car washing guaranteeCar washing guarantee(free car washing if there is rainy or snowy within 3 days after car washing)(free car washing if there is rainy or snowy within 3 days after car washing)
Effects: average growth rate 12.5% (cf. others: 7%)
-
8/9/2019 13269039 CRM and Loyalty
18/27
18
Part 3. Approach Customer Loyalty ProgramsPart 3. Approach Customer Loyalty Programs
1. Loyalty programs2. Strategic reward programs
3. Core strategies building reward programs
-
8/9/2019 13269039 CRM and Loyalty
19/27
19
Loyalty program: RewardLoyalty program: Reward
The plan objectives for this program are:
2. Effectiveness, cost savings, profitability, etc.
3. Develop a greater sense of concern and loyalty about the company or brand
4. Strengthen communications between customers and companies.
5. Provide financial rewards to customers who have demonstrated performance or
contribution
6. Enhance the Companys ability to meet or exceed its target goals.
Campaign and Reward
Discrete CommunicationModel
individual ApproachLoyalty
Continuous CommunicationModel
Mass Approach
-
8/9/2019 13269039 CRM and Loyalty
20/27
20
Reward typesReward types
Promotion
(Price)
Airline Mileage,
Coupon
Lotteries
(Instant Scratchies)
Multi-product
Frequent-buyer
DirectlyDirectly
SupportsSupports
ValueValue
PropositionProposition
OtherOther
indirectindirect
TypesTypes
of rewardof reward
ImmediateImmediate DelayedDelayed
Dowling.,Mark Uncles, 1997
Timing of RewardTiming of Reward
Typeofrewa
rd
Typeofrewa
rd
Continuity
Reward
-
8/9/2019 13269039 CRM and Loyalty
21/27
21
4 characters to differentiate4 characters to differentiate
4 Attributes
((AAccomplishment)ccomplishment) (Continuity)(Continuity) (Attraction)(Attraction) (Acquisition)(Acquisition)
Points acquisition
Reward offering cycle and
Getting Reward gifts
Not for short term events
Induce repurchase
Based on customer needs
for offering rewards
Offering diverse
Reward options
For acquiring
new customer
For acquiring customer
from competitors
-
8/9/2019 13269039 CRM and Loyalty
22/27
22
Loyalty Program Reward SchedulesLoyalty Program Reward Schedules
(A) Typical Response
Functions
(B) An Alternative Response
Function
(Airlines Mileage Card)Airlines often use a variation of thisscheme where an economy class airfareattracts 1 point per kilometer or dollar spent
(GM Auto Card)
point
#of $SpentAccumulated
Spending
Accessto
Rewards
(Citibank)Citigold banking, Citibanking , General DB According to Household ( offspringget same level with parents)
-
8/9/2019 13269039 CRM and Loyalty
23/27
23
Part 4. Case Study: One of International Hotel in NZPart 4. Case Study: One of International Hotel in NZ
Background: in Palmerston North, NZ
1. Location
A provincial city, with approximately 75,000 people
It is not a major destination for international visitors to NZ. But it does host a large number of conferences each year
2. Objective
The one of an international larger chain of hotels.
The business manager believes that if it were not for the revenue from the other facilities, the hotel would struggle toremain open on accommodation revenue alone.
3. Marketing
Corporate marketing programs initiated by head office have not always worked in the hotel, so local marketing
initiatives have been launched in Palmerston North.
Some specific events marketing to improve its weekend occupancy rates and this seems to have been successful.
Follow-up letters.
The latest marketing push= a Gold Card to increase new customers and entice past customers to return.$39.50,
provides various discounts and special occasion offers
4. Methodology: A mail survey was sent to all customers on the hotel Gold Card DB. A 4 page questionnaire to 700
customers.
-
8/9/2019 13269039 CRM and Loyalty
24/27
24
Data Analysis and discussionData Analysis and discussion
Card purchase and features
2. For personal use
3. Because good range of benefits offered
4. Because good value for money
The data show that 2/3 purchasers were new customers of the hotel.1/3 said they purchased the
card because of persuasive sellers.
Purchasers of card were more interested in the local facilities like the, bar, family restaurant and
health club.
Percent of respondents using the services was fairly low, except for the family restaurant to cheap
deals. As a customer retention strategy its success is therefore doubtful.
There were a number of comments from respondents that referred to their dissatisfaction. Customers
are unlikely to return or become loyal if they are dissatisfied with the service provided. (Dube, 1994)
This highlights the point that satisfaction is not an accurate indicator of customer loyalty.
-
8/9/2019 13269039 CRM and Loyalty
25/27
25
Part 5. Summary & ConclusionPart 5. Summary & Conclusion
The customers of the hotel who purchased a card and responded to the questionnaire, exhibit thecharacteristics of Morgans mercenaries (1996 ).
High satisfaction, low to medium loyalty and low commitment to the company. In order to succeed,
loyalty programs need to develop loyalists (Morgan, 1996)- customers who have high
satisfaction, high loyalty and who will stay and be supportive of the company.
The hotel case study: to build customer loyalty and therefore retention by selling a discount
card in Palmerton North.
Discount card does not appear to increase customer loyalty and that many customers buy the
card because they perceive it to be good value for money.
Summary
Conclusion
-
8/9/2019 13269039 CRM and Loyalty
26/27
26
Part 6. ReferencesPart 6. References
Dowling, Uncles 1997, Do customer loyalty programs really work?,
Sloan Management Review, Vol. 38
McIlroy, Barnett 2000, Building customer relationships: do discount
cards work? Managing Service Quality Journal Vol.
10 2000
Gustafsson 2000, Improving Customer Satisfaction, Loyalty, and
Profit Jossey-Bass Inc.
-
8/9/2019 13269039 CRM and Loyalty
27/27
27
A&Q