17 September 2009

Outlines

Relationship marketingCustomer relationship managementChanging nature of customerCapturing value from customerThe marketing landscape

Relationship MarketingDevelopment and maintenance of long

term cost effective exchange relationship with customer , suppliers and other partners of organization.

Long tem commitment Customer focus Competitive advantage

Customer Relationship Management (CRM)

The overall process of building and maintaining profitable customer relationship by delivering superior customer value and satisfaction.

It deals with Acquiring RetainingGrowing customer

CRM cont…..Customer ValueThe difference between the total customer value and total cost.

Customer SatisfactionThe extend to which product perceived performance matches a

buyer expectation.

Performance < Expectation dissatisfied

Performance = Expectation satisfied

Performance > Expectation highly satisfied

Customer Relationship Levels and Tools

Companies can build customer relationship at many levels depending on nature of target market.

With low margin customerThrough sales promotion, advertisement contact phone

number and websites.With high level margin customerDevelop customer loyalty and retention program beyond

offering high level value and satisfaction. They use special tools.

Changing Nature Of Customer RelationshipRelating with more carefully selected customerRelating for long termRelating directlyPartner relationship management

Partners inside the company

Partners outside the company

Relating With More Carefully Selected CustomerMost marketers realize that they do not want

relationship with every customer instead companies now are targeting fewer more profitable customer.

They assess value of customer to firm (Selective Relationship Marketing)

Customer profitability analysis.At the same time companies are finding the new

ways to deliver more value to customer.

Relating For Long Term

Today companies are going beyond designing strategies to attract new customer and create transactions with them, they are using CRM to attract, retain and build profitable long term relationship.

New view of Marketing is the art and science of finding, retaining and growing profitable customer.

Why Companies Emphasis This

Increase in competitionOvercapacity in many industriesIncrease in number of sellers

On average it cost 5 to 10 times as much to attract a new customer as it does to keep a current customer satisfied.

Relating directlyMany companies are also connecting more directly.Today customer can buy virtually any product without

going to store throughTelephoneMail orderOnline using web Business purchasing agent routinely shop on web for

items ranging from standard office supplies to high priced equipment.

Partner Relationship Management

Marketers realize that they cannot they cannot go alone.

They must work with variety of marketing partners in addition to being good at CRM They also must good in Partners relationship management.

“Working closely with partners in other

company departments and outside the company to jointly bring greater value to

customer”

Partners Inside Company

Old ThinkingMarketing is done only by marketing, sales and customer

support people.

New ThinkingEvery department can interact with customer and today all

departments linking together to create customer value.Company is unable to obtain its long term objective until its

all departments work together.

Partners Outside The Company

How marketers connect with supplier, channel partners and competitors.

Channel partners areDistributorsWholesalerRetailer Today suppliers are not treated as venders and distributors

are not as customers. They all treated as partners in delivering customer value.

Capturing value from customer

Creating customer loyalty and retention

Growing share of customerBuilding customer equity Building right relationship with right

customer

Creating Customer Loyalty And Retention

Customer lifetime value “The value of the entire stream of purchases that the

customer would make over a life time.”Highly satisfied customer buy again and also tell other

about the product.Companies realize that losing a customer means losing

more than a single customer. In means losing the stream of purchases that he would make over a life time.

Growing Customer Share

Share of customer The portion of the customer’s purchasing that a customer gets in

its product categories.Market share The % of target market that company is capturing in the

industry. Marketers spend less time in thinking to increase market share

and spend more time to increase share of customer by Offering greater value

Cross selling and up selling

Building Customer Equity

“The total combined customer life time value of all the company’s customers.”

This is a better measures of performance than current sale and market share.

Building Right Relationship With Right Customer

Customers are assets and need to be managed and maximized, but not all customer or even not all loyal customer

Some loyal customer can be unprofitableSome disloyal customer can be profitable

Company can classify customer according to the potential profitability and loyalty and manage relationship accordingly.

Building Right Relationship With Right Customer

High profitability

Lowprofitability

profitability

LoyaltyShort termcustomer

Long termcustomer

ButterfliesGood fit between

company’s offering and customer’s

need: high profit potential

True friendsGood fit between

Company’s offering andCustomer need: highest

profit potential

StrangersLittle fit between

Company’s offering andCustomer’s need: lowest

Profit potential

Barnacleslimited fit between

Company’s offering andCustomer need: low

profit potential

The new Marketing Landscape

The new Digital ageInternetGlobalization Call for more ethics and social

Responsibilities