Service Prestn

7/30/2019 Service Prestn

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Customer Relationship

Management


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What is Customer Relationship Management(CRM)?

The approach ofidentifying, establishing,

maintaining, and

enhancing lasting

relationships with

customers.

The formation ofbondsbetween a company and

its customers.


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Benefits of CRM

Quality and Efficiency

Decrease in Overall Costs

Decision Support

Customer Attention Increase Profitability


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Reasons of CRM

Three Key Phases: Customer Acquisition

Customer Retention

Customer Extension


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Four Stages of Brand Loyalty in a

Consumer

Cognitive loyalty perception from brand

attribute information that one brand is preferable

to its alternatives

Affective loyalty developing a liking for the

brand based on cumulatively satisfying usage

occasions

Conative loyalty commitment to rebuying thesame brand

Action loyalty exhibiting consistent repurchase

behavior


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Customer-Firm Relationship

Database Marketing: Involves the use of technology by delivering

differentiated service levels to consumers and subsequentlytracking the relationship.

Interaction Marketing: Usually in B2B context where people and

the social process also add mutually beneficial value.

Network Marketing: Common in B2B context where companies

commit resources to develop positions in a network of

relationships with the stakeholders and relevant agencies.

Todays marketers seek to develop long-term relationshipswith customers. Relationship marketing includes:


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Types of Relationships with

Customers (Table 12.1)

Type of Relationship--Firm and

Customer

Nature ofService Delivery

Membership No formal relationship

Continuous Cable TV Radio station

Insurance Police

College enrollment Lighthouse

Discrete transactions Subscriber phone Pay phone

Theater subscription Movie theater

Warranty repair Public transport


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What Makes Loyal Customers

More Profitable? Tend to spend more as relationship develops

customers balances may grow

may consolidate purchases to one supplier

Cost less to serve less need for information and assistance

make fewer mistakes

Recommend new customers to firm (act asunpaid sales people)

Trust leads to willingness to pay regular prices

vs. shopping for discounts


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Basic Segmentation Issues:

Building an Appropriate Customer Portfolio

Target customers whose needs match firms

capabilities

Focus on value of prospective customerswithin each segment, not justnumbers

Avoid targeting customers who might abuse:

our employees, facilities other customers

Create a mix of segments to reduce risks of

volatility during swings of economic cycles


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Service-Relevant Segmentation

Variables

Timing of service use (e.g., by hour, day,

season)

Level of skill and experience as co-

producer/self-server

Preferred language in face-to-face contact

Access to electronic delivery systems (e.g.,

Internet)

Attitudes toward use of new service

technologies


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Identifying and Selecting Target

Segments

User characteristics demographics

psychographics

geographic location

benefits sought

User behavior

when, where, how services used

quantity/value of purchases frequency of use

profitability of relationship

sensitivity to marketing variables


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Portfolio of Professional Assignments

Analyt ical Work on Project Data

Bread and Butter Projects

Signif icant Projects

Pacesetters

Major, State-of-the-art challenges for the firms

principals that give the firm high visibility

Demanding client assignments offering a

learning experience for the firms most

experienced associates

Routine client projects shared

among principals and associates

Entry-level tasks for new

associates or for research

assistants & paraprofessionals


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The Customer Pyramid (Fig. 12.5)

Lead

Iron

Gold

Which segment sees high value in

our offer, spends more with us over

time, costs less to maintain, and

spreads positive word-of-mouth?

Which segment costs us in time,

effort and money, yet does not

provide the return we want?

Which segment is difficult to dobusiness with?

Platinum

Good RelationshipCustomers

Poor Relationship

Customers


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How Customers See Relational Benefits in

Service Industries

Confidence benefits

less risk of something going wrong, less anxiety

ability to trust provider

know what to expect

get firms best service level

Social benefits

mutual recognition, known by name

friendship, enjoyment of social aspects

Special treatment benefits

better prices, discounts, special deals unavailable to others

extra services

higher priority with waits, faster service


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The Customer Satisfaction-Loyalty

Relationship (Fig. 12.6)

0

20

40

60

80

100

1 2 3 4 5

Loyalty(Reten

tion)

Very

dissatisfied Dissatisfied

Neither

satisfied

nordissatisfiedSatisfied

Very

Satisfied

Satisfaction

Near Apos t le

Zone of Defect ion

Zone of Ind if ference

Zone of Affect ion

Terrorist

Apos t le


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The Wheel of Loyalty (Fig. 12.7)1. Bui ld a

Foundat ion

for Loyalty

2. Create Loy altyBonds

3. Reduce

Churn Drivers

Customer

Loyal ty

Be selective in acquisition

Conduct churn diagnosticSegment the market

Use effective tiering

of service.

Deliver quality

service.

Deepen the

relationshipGive loyalty

rewards

Build higher

level bonds

Implement complainthandling & service

recovery

Address key churn drivers

Increase switching

costs

Enabled through:

Frontline staff

Account

managers

Membership

programs

CRM

Systems


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Drivers of Service Switching

Service

Switching

Service Encounter Failures Uncaring

Impolite

Unresponsive

Unknowledgeable

Response to Service Failure Negative Response

No Response Reluctant Response

Pricing High Price

Price Increases

Unfair Pricing

Deceptive Pricing

Inconvenience Location/Hours

Wait for Appointment

Wait for Service

Competition

Found Better Service

Ethical Problems Cheat

Hard Sell

Involuntary Switching Customer Moved

Provider Closed

Value Proposition

Others

Service Failure / Recovery

Core Service Failure Service Mistakes

Billing Errors

Service Catastrophe

Unsafe

Conflict of Interest


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Common CRM Applications

Signifies the whole process by which relationshipswith customers are built and maintained.

CRM as an enabler, offering a unified customer

interface and allow firms to better understand andsegment the customers etc. Applications include:

Data collection

Data analysis

Sales force automation

Marketing automation

Call center automation


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Managing Customer Relationships

The global salesperson must be involved in the following activities in

order to initiate, develop and enhance the process that is aimed atbuilding trust and commitment with the customer.

Initiating the relationship

Engage in strategic prospecting and qualifying;

Gather and study pre-call information;

Identify buying influences;

Plan the initial sales call;

Demonstrate an understanding of the customers needs;

Identify opportunities to build a relationship; and

Illustrate the value of a relationship with the customer


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The global salesperson must be involved in the following activities in

order to initiate, develop and enhance the process that is aimed atbuilding trust and commitment with the customer.

Developing the relationship

Select an appropriate offering;

Customise the relationship;

Link the solutions with the customers needs;

Discuss customer concerns;

Summarize the solution to confirm benefits; and

Secure commitment.


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The global salesperson must be involved in the following activities inorder to initiate, develop and enhance the process that is aimed atbuilding trust and commitment with the customer.

Enhancing the relationship

Assess customer satisfaction;

Take action to ensure satisfaction;

Maintain open, two-way

communication; and

Work to add value and enhancemutual opportunities.


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The customer perception

Keys to changing customer perception

Develop customer profile

Look at your business with customer

perspective Be aware of over promising (Avoid if not

necessary)

Do not cheat your customer - Just to sell the

Product Your Image Representing Your company

Problem great opportunity to win a customer


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