CustomerRelationshipManagement

--AWinningCustomerStrategySeminarpresentationApril2004CustomerRelationshipManagemeAgendaCustomerRelationshipManagementPresentation 8:00-9:15Break 9:15-9:30Case1–SanFabianSupplyCompany 9:30-10:30Case2–SoloMobilePhoneCompany 10:30-12:002Author/DivisionAgendaCustomerRelationshipMaWhatisCRMinyourmind?Whatiscustomerrelationshipmanagement?WhatdoesCRMbringtocompanies?AsurveyonseniormarketingexecutivesatFortune1000companiesindicatesawidespreadfrustrationaboutthereturnonCRMinvestmentsCRMinnotatechnologyterm,butinstead,astrategydrivenholisticmanagementapproachSource:BoozAllenHamiltonSurvey,20013Author/DivisionWhatisCRMinyourmind?WhatCRMisacustomer-andvalue-basedmanagementapproachtoincreasethecompanyvalueCustomerRelationshipManagementisa

customer-andvalue-based

companyorientation

withthegoalofbuildingupandfullybenefitingfrom

lastingandprofitablecustomerrelationships

throughholisticandindividualized

marketing,salesandserviceconcepts

usingstate-of-the-arttechnologiesCRMdefinitionIdentifyingthetopcustomersandexploitingthemaximumshareoftheirexpensebudgetsRaisingtheefficiencyofcustomermanagementEstablishingcustomerloyaltyand"lifetime"relationshipsFullyexploitingthepotentialcustomersegmentsbyacquiringnewcustomers

Therebyincreasing

thecompanyvalueCRMobjectives4Author/DivisionCRMisacustomer-andvalue-bCustomerRelationshipManagementdiffersfromclassicalmarketinginmanywaysTraditionalmarketingCustomerrelationshipmanagementObjectivesGeneratesalesCreatealoyalcustomerFocusAcquisitionphaseTotalcustomerlife-cycleTimeframeShorttermMediumtolongtermPerformanceindicatorsMarketshare,salesShareofwallet,customerprofitability,customervalueCustomerknowledgeDemandsfromcustomersegmentsIndividualpreferencesandneedsProductStand-aloneproductIntegrationofproductsandservicesPriceGeneraldiscountsPricedifferentiationonthebasisofcustomerloyaltySaleschannelsTraditionalsaleschannels(multi-level)"Disintermediation",multichannelmanagementCommunicationUnidirectionalcommunicationInteractivedialogwithcustomersandcommunities,

24hrs./7dayavailability5Author/DivisionCustomerRelationshipManagemeCRMistheholisticapproachtoacustomer-valuebasedcompanyorientation–fourenablerssetuptheframe...CreateGainUnderstandRetainORGANIZATIONSTRATEGYCULTURECRM-StrategyHolisticapproach/

top-managementissueDefinitionoftargetsegmentsandcustomersValue-basedprioritizationOrganizationandprocessesCustomer-orientedstructuresandprocessesCustomerprocess/touchpointinnovationOrganizationalanchoring

oftheCRMresponsibilityTECHNOLOGYTechnologySystemintegrationUseofe-technologiesSelectionofsystem/technologypartnersCulture

andchangemanagementConsolidatingthecustomervalueorientationManagementprocessesandincentivesystemsContinuouschangemanagementandimprovementprocessesCustomervalueCRMenablers6Author/DivisionCRMistheholisticapproachtCRMcreateslastingstrategiccompetitiveadvantages"Understand"marketsandcustomers"Create"superiorcustomeroffers"Retain"profitablecustomers"Gain"profitablecustomersBuildingupsuperiorcustomerknowledge

Identifyingtargetsegmentsanddeveloping

targetcustomerspecificmarketing,

salesandserviceconcepts

Focusingonthehighest-value

customersRaisingtheentrybarriersfor

competitorsbybuildingup

lastingrelationshipswiththe

customers

Developinga"learningrelationship"

inlong-termcustomerrelationshipsRaisingtheentrybarriersforcompetitorsthroughspecificproductandserviceoffersHighercompetitivebarriersbycoveringallsaleschannels

Loweringconflictpotentialthrough

theproactiveintegrationofthe

variouschannelsRaisingcustomers'costsofchangingsuppliersbycovering

allneedsCreateGainUnderstandRetainORGANIZATIONSTRATEGYCULTURETECHNOLOGYCustomervalue7Author/DivisionCRMcreateslastingstrategicMarketing-Mixarecoreelementsofcustomerrelationship

strategyMarketing-MixTargetMarketproductplacepricepromotionMarketing-Mixprovidesadecision-makingmethodfordecidinghow

tomanagethecustomerrelationshipDifferentiatedproducttargetingdifferentcustomersegmentProductcustomization:design,function,packagingServicelevelPricestrategy:e.g.chargepricepremiumforvaluablecustomersegmentPaymenttermsSpecialdiscountsSelectofMarketingCommunicationvehicletobetterreachtargetcustomer:TVads,PR,SponsorshipEventsforvaluablecustomersVIPclubEffectivechannelstrategy:one-to-onevisit,callcenter,stores…Variouschannelcombinationtomoreefficientlyservetargetcustomers8Author/DivisionMarketing-MixarecoreelementThethreemainapplicationareasofCRMOperationalCRMAnalyticalCRMCRMcomponentsCollaborativeCRMcampaignmanagementAutomaticallydistributionERP-integrationCustomerserviceDataMining/DataWarehousePurchaseprobabilityForecastingCustomersegmentationCross-selling-potentialRegional-purchase-behaviorChannel-managementFace-to-FaceCall-CenterBrief/FaxWeb/Mail9Author/DivisionThethreemainapplicationareTherearequiteafewobstaclestoeffectivelyapplyCRMLackofmarketingfundamentalsLackofclearvaluepropositionandfailuretotargetcustomersTechnologyisintroducedbeforecompaniesmastermarketingfundamentalsRelianceonmassmarketingPoordataqualityIncompleteinformationInaccurateinformationInadequatedatacollectionsystemsLimitedexternalsourcesofdata(e.g.,noorfewlist-rentalcompanies)PoordirectmarketingskillsLackofexperiencedstatisticiansandmarketingprogramdevelopersLackofoutsourcingresources,suchasdirect-mailortelemarketingagenciesHeavyemphasisonacademicandoverlysophisticatedanalysesOrganizationalweaknessesNostrongcentralizedmarketingorproductgroupstodriveCRMCRMregardedasasmall,low-prioritymarketingareaFlawedperformancemeasurements;limitedsupportresources,e.g.,callcenteroperators;littleornocross-functionaleffort10Author/DivisionTherearequiteafewobstacleAbilitytodifferentiateproductBuyingtransactionfrequencyAccesstocustomerinformationAppropriateprogramDifferentindustrieshavedifferentdemandonCRMprogramExampleindustriesValueofcustomerLowHighNoneProgramchoiceWeakStrongNoYesNoYesDatacaptureChangebehaviorDifferentiationDatacapture,differentiationDatacaptureNoneRealestateCommoditytrading,non-brandedgoodsNewspapersThemeparks,museums,playhousesAirlines,hotels,creditcards,telecoms,bankingMembershipservices(e.g.,travel),mail-orderclubsDepartmentstores,retailersGrocery,gasstationsHighLowHighLow11AbilitytodifferentiateproduMainobjectivesofCRMinGermantopcompanies[%]1)Increasesalesforexistingproduct/servicerangeVeryimportant/importantEmpiricalresultsconfirmthemainobjectiveforpursuingaCRMstrategyistoincreasecustomerloyaltyMediumLessimportant/notimportantIncreasesalesbycross-/up-sellingWinnewcustomersIncreasecustomerretention/loyaltyIncreaseefficiency/reducecostsinmarketingIncreaseefficiency/reducecostinsalesIncreaseefficiency/reducecostsinserviceIncreaseefficiency/reducecostsinITutilization1) Cross-industrystudy,

200topcompaniesinGermany

Source:RolandBergerResearch200177149582517592021934354291758271554311543352212Author/DivisionMainobjectivesofCRMinGermCRMapplicationexamplesHotelAirlineTelecomLoyaltyclubmembership:PointscollectionandrewardCustomerdatabasetosupportquickcheck-inandcustomizedservice(Newspaperintheroom,fruitsandwelcomenotes…)Proactivelydrivesalesleadsbycombiningupcomingtradeshowandconferenceinformationwithconsolicatedcustomerdatatobetterservehighvaluecustomers:corporateaccountandbusinesstravelerMileagecard:mileagecollectionandrewardAirportspecialloungeforvaluablecustomersDifferentiatedservicefordifferentvaluecustomersVIPclub:VIPcustomercangetfastandpersonalizedserviceUsemulti-channeltoapproachcustomersandtofulfillcustomerservice:callcenter,VIPcustomerrepresentatives,Stores,website,etc.Leveragecustomerdatabasetodoup-sellandcross-sell,andmoreimportantly,toreducechurnIndustry(B2B)GlobalAccountmanagement:accountprofilingKeyaccountmanagerfor‘A-class’customersDifferentiatedpaymentpractice:e.g.extendedtermofpayment13Author/DivisionCRMapplicationexamplesHotelAUp-sellandcross-sellCustomerFeedbackDatacollectionChannelmixtoapproachpotentialcustomersFriendlycustomerinterfaceMulti-channelserviceVIPcustomervalue-addedserviceInformationontheBillNewsLetterCallcentertocollectfeedbackUnderstandreasonstochurnLeveragecustomerdatabasetobuildchurnwarningsystemProactivepromotetocustomerswithinclinationtochurnLoyaltyprogramAcquisitionChurnreductionCustomerServiceVisitourshop!!!GreatdealonMMSCallcenterproductrecommendationProduct/servicedemonstrationatstoreProductinformationonthebillExample:MobileOperatorappliesCRMleversineachcustomerlifecyclestageMobileOperatorExample14Author/DivisionUp-sellandcross-sellCustomerForconsumergoodscompanies,channelpartnersaswellasconsumersareboththeircustomersMobilePhoneCompanyExampleMobilePhoneCompanyChannel:wholesaler/retailerOperatorServiceEnd-user(consumer)SellHandsetsubsidySellSellUnderstandcustomerneedsisthebasisforasuccessfulcustomerrelationshipmanagementEnd-user/consumeristhemaincustomer,whosedemandmustbeanalyzedindepthandbewell-segmentedAtthesametime,CRMalsoneedstobeusedtofosterrelationshipswithchannelpartners15Author/DivisionForconsumergoodscompanies,ConsumergoodscompaniesshouldapplydifferentCRMstrategyandactionstodifferentcustomertypesChannel:wholesaler/retailerOperatorEnd-user(consumer)MobilePhoneCompanyDisguisedExampleCustomerDemandsCRMleversHighdistributionmarginandlargevolumeIn-timedeliveryandlowstockcostGoodtechnologyandservicesupportHighcustomersatisfactionrateGolden-channelaward:offerawardtobestperformancewholesaler/retailerBetterproductofferingsTechnologycallcentertotimelysupportchannel’srequestontechsupportIncorporatechannel’ssupplychainsystemtoMobilePhoneCompany’ssupplychainsystemtorealizejust-in-timesupplyHighARPUMorenewsubscriberandlowerchurnrateHighercustomersatisfactionrateIncorporatespecialmobileoperatorfunctions/programsintoproductdesignCarryoperatorlogoontheproductTechnologycallcentertooffertimelytechsupportOfferspecialdiscountstoMobileVIPcustomersHighpriceperformanceratioBetterqualityguaranteeandcustomerserviceFeelingofownershipandcarebymobilephonecompanyBetterproductdesigntoserveaspecificcustomersegmentCustomerdatabaseandtargetedpromotionConsumerclub–morevalue-addedfunctionstoclubmembersServicenetworkandcallcenter16Author/DivisionConsumergoodscompaniesshoulCaseStudiesWewilldotwocasesinthenexthours.Oneisanindustrialgoodscompany,andtheotherisconsumergoodscompanyLet’sseehowcustomerrelationshipcanworkinthesecompanies17Author/DivisionCaseStudiesWewilldotwocasCaseStudy&Exercises–SanFabianSupplyCompanyCaseStudy&Exercises–SanFaBriefIntroductionSituationComplicationResolutionDemandforconstructionmaterialhasdecreasedsinceMacDowellexpandeditsproductioncapacityPhilippineisstillarelationshipdrivenbusinessworldandthewaytodobusinessisdifferentWealthisconcentratedinPhilmarketOneofthelargestsuppliersofbuildingmaterialsinPhilippineTheexclusivedistributorofMacDowellproductsinPhilippineHasgoodreputationforwell-trainedandaggressivesalesforceAmanufacturerofnoncombustible,chemically-resistantmaterialIscurrentlyplaguedbyplantovercapacityandeagertoboostsalesMarketSanFabianMacDowell(MD)MacDowell(MD)WishtoincreasesalesbyhavingmoredealerscarryingtheirproductsWanttotakeuponitselfthewholesaledistributionroleSanFabianhadbeenfillingTherefore,itwantstoterminateexclusivedistributoragreementwithSanFabianWon’ttakeanon-exclusivecontractButMDproductscontributesalottoSanFabiansalesandnetincomeItisnoteasytogetexclusiveagreementwithothersupplierSanFabianWhatwillMacDowelldowithcustomerrelationshipwithSanFabian?HowwillSanFabianreactfacingthechangefromMacDowell19Author/DivisionBriefIntroductionSituationCoCaseexerciseTask:Afterreadingthroughthecase,youarerequiredtoanswerfollowingquestionsWhatdoesSanFabiandoforMacDowell?WhatdoesMacDowelldoforSanFabian?WhatchangeisMacDowellproposingandwhy?WhatbenefitsandrisksMacDowellwillgetfromthischange?IfyouarethemanagementofMacDowell,howwillyoutreatthisexclusivedistributorrelationship?WhatareSanFabian’salternativesifyouareinvitedtogiveadvicetoSanFabian?HowcanSanFabiancometoanagreeablesolutionwithMacDowell?20minutesreadinganddiscussion20Author/DivisionCaseexerciseTask:AfterreadiKeytakeawaysItisalwaysaharddecisionrelatedtochannelmodels:exclusivevs.selectivevs.massdistribution,whichwecanoftenseeindailybusinessoperationThereisaninevitablelove/haterelationshipbetweenchannelmembers.Bothwantproducttobesold,buteachwantsmoreofthesalesmarginChannelprofitsaremaximizedwhencooperationovercomesconflict.Therefore,howtoachievewin-winbecomesthecriticaltopicDistributorsprovideavarietyofactivitiesonbehalfoftheirmanufacturers.Exclusivedistributionmodelcanstimulatedistributortomakegreatefforttopushthesales21Author/DivisionKeytakeawaysItisalwaysahaCaseStudy&Exercises–SoloMobilePhoneCompanyCaseStudy&Exercises–SoloMCasebackground*SoloisaEuropeanmobilephonecompanywhoseproductareallGSMmobilephones.Itisamongthetopthreelargestmobilephonemanufacturerintheworld.SolohasenteredChinamarketin1995andperformedquitewellinChinabeforeyear2000.ItisthethirdlargestplayeronChinamarket,onlyaftertheglobalmobilegiantAAandBB.Soloenjoysgoodreputationofhighqualityandbusinesspeopletargeteddesign.IthadquitesoundcustomerbaseinChinaanditsbrandawarenessishigh.*Disguisedcase,alldataandcompanynameinthiscasearedisguisedSoloMobileSuccessin1990sChallengeandthreatsince2001Chinamobilephonemarketisstillgrowingquickly,butmoreandmoredominatedbyyoungandtrendyproducts.Youngpeopletendtochangetheirmobilephonesmorefrequently.Therefore,Solodecidedtochangeitsfocusandbrandimagesince2001,puttingmoreemphasisonyoungpeopleButtheeffortofchangingbrandpositioningseemstoweakenSolo’sbrandimage.Inarecentmarketsurvey,consumersresponsesshowtheirconfusionofthebrandimageofSoloFastgrowthoflocalbrand–TL,BD,AM,KK,etc.–formedhugethreattoglobalplayersonthemarket.Underthecompetitionpressure,Solo’smarketsharedecreasedfrom15%in2001to5%in2003WhatSoloshoulddotoregainthelostmarketshare?23Author/DivisionCasebackground*SoloisaEuroTheChinesemobilephonemarketisthefastestgrowingmobilephonemarket*ProjectionCAGR+18%ChinaMobilePhoneMarketSize(allstandards,mio.units)GSM

CDMA

33’4

52’3

55’162’869’777’4***FY

7’59’810’812’24Author/DivisionTheChinesemobilephonemarkeTrendy,FashionableandMulti-functionmobilephonesbecomethemainstreamincompetition

MorefashionabledesignColordisplayandPoly-phonicringtoneImbeddedcamera,games,MP3CompeteontrendydesignandmorefunctionsVariousformfactors:Clamshell,block,slider,flip,rotateWhilepriceisgoingdownanddownSoloMobile25Author/DivisionTrendy,FashionableandMulti-NoonehadexpectedthefastgrowthoflocalmobilemanufacturersSoloMobileLocalmanufacturersgainmarketsharemuchfasterthanexpectedWinningfactorsoflocalmobilephonemanufacturersLocalbrandmarketshare%Channelcoverageandcontrol:localmanufacturerusemoresalespeopleandtendtobuildownchannelinsteadofusingagentsHighpenetrationin2nd-3rdTiercitiesandruralareas(whereinternationalplayersareweak)MoreaggressiveadvertisementBetterunderstandmostlocalconsumer’stastefordesignandofferluxurydesignandpackagephones(e.g.putdiamondonthecover)CheaperpriceLocalbrand’schannelcoverageandpenetrationismostdistinctivefrominternationalplayers26Author/DivisionNoonehadexpectedthefastgChannelstructureischanging,whichgiveSolonewchallengesSoloMobileChangesinchannelstructureSolo(andotherinternationalplayers)useNationalDistributorfordistributionSoloNDCMCC(Operator)RDRetailerConsumerCurrentchannelstructureQuickdevelopmentofKRC(keyretailchains)inTier1cities,suchasGuoMei,SuNing,whoselldirectlytoconsumers.Mobileoperators(CMCCandUnicom)becomemoreaggressiveinhandsetbusinessbyheavilyusinghandsetsubsidyLocalmobilephonemanufacturer'ssuccessinownchannelbusinessmodelcallmarketattention.PeopletendtoawarethatNDmodelinvolvestoomanyleversinthechannelstructure,thusloweringdistributionefficiencyandmarketresponseandincreasingchannelcost.Internationalplayersarethinkingofusingprovincial/regionaldistributorsinsteadofNationaldistributorsinsomearea27Author/DivisionChannelstructureischanging,SoloisunderheavypressureoflosingmarketshareandloweringbrandawarenessandimageSoloSeniorManagerMobileOperatorNationalDistributorConsumerOurmarketsharedecreasedfrom15%threeyearsagoto5%lastyearandwestillsawadownwardtrendthisyearWeplantoputmoreemphasisonhandsetsubsidyandplaymoreroleinhandsetdistribution.MobilemanufacturerM,N,SareallapproachingusforcooperationWehavelaunchedsomegoodproductslastyearandweinvestinadvertisement,butourpresenceinretailstoresarelowandconsumerscannotseeourproductsinalotstoresSoloMarketingManagerWecarryquitealotbrands.Whatwecareiswhichbrandcangivemebestprofit.WearealsounderpressureoflowermarginandtheemergenceofKRCsIknowSolobrand,butIcannottellwhetherIlikethemornot.Idon’tseetheirnewproductsmuch.SoloMobile28Author/DivisionSoloisunderheavypressureoSoloisthinkingofacustomerrelationshipstrategytohelprecoverthebusinessWenoticedthatinthepastweputtoomuchemphasisonSell,SellandSell,butmisstherealcustomerrelationshipWearelaunchinganewphoneandwewanttoincorporatemorecustomerrelationshipstrategyintothesellingofthisproductWeneedsomeonetohelpustodevelopawinningcustomerrelationshipstrategy!!!SoloMobile29Author/DivisionSoloisthinkingofacustomerYouareinvitedbySolomanagementtodraftaproductmarketingandsalesstrategyforanewphonemodelCaseexerciseTask:YouactasoutsideconsultanttohelpSolotomaximizetheperformanceofitsnewphonemodelAllparticipantswilldivideinto6groups(5peopleagroup)Group1,2,3Group4,5,6DesigncustomerrelationshipstrategyforPhoneMX75targetingmassconsumermarket(throughdistributorandretailerchannels)DesigncustomerrelationshipstrategyforPhoneMY75targetingmobileoperator(CMCC)40minutesforpreparation5-10minuteseachgrouptopresent30Author/DivisionYouareinvitedbySolomanageWhatyoudeliverafter40minutesshouldbeabletoaddressfollowingquestionsProductfeatures/strategyPricingGroup1,2,3(retailmarketgroup)Group4,5,6(OperatorGroup)PromotionService/supportHowwillyoupositiontheproductandtargetconsumers?Whatkindofproductfeatures/functions/valueyouwanttotellretailmarketto:attracttargetconsumerandpersuadethechanneltocarrymoreproductsHowwouldyoupricethisproducttobetterserveitspositioningandtohitthemarketWhatkindofads/promotioncampaignsyouwanttobetterattractthecustomerandmakechanneltocarrymoreoftheproductsOtherCaseexerciseWhatkindofservice/channelsupportyoucanoffertoattractchannelpartners?Whatotheractionsyouwilltaketomaximizethepullandpusheffectonthemarket?Howwillyoupositiontheproductandwhatkindofproductfeatures/functions/valueyouwanttotelloperatortosigncontractwithyouonthisproduct?HowwouldyoupricethisproducttobetterattractoperatorIsthereanypromotion/adsSolocandotoincreasethevolumeoperatorwillingtobuyfromus?Whatkindofservice/channelsupportyoucanoffertobetterattractoperators?Whatotheractionsyouwilltaketocontributetothecontractwithoperatorandevenlong-termrelationship?31Author/DivisionWhatyoudeliverafter40minuCustomerRelationshipManagement

--AWinningCustomerStrategySeminarpresentationApril2004CustomerRelationshipManagemeAgendaCustomerRelationshipManagementPresentation 8:00-9:15Break 9:15-9:30Case1–SanFabianSupplyCompany 9:30-10:30Case2–SoloMobilePhoneCompany 10:30-12:0033Author/DivisionAgendaCustomerRelationshipMaWhatisCRMinyourmind?Whatiscustomerrelationshipmanagement?WhatdoesCRMbringtocompanies?AsurveyonseniormarketingexecutivesatFortune1000companiesindicatesawidespreadfrustrationaboutthereturnonCRMinvestmentsCRMinnotatechnologyterm,butinstead,astrategydrivenholisticmanagementapproachSource:BoozAllenHamiltonSurvey,200134Author/DivisionWhatisCRMinyourmind?WhatCRMisacustomer-andvalue-basedmanagementapproachtoincreasethecompanyvalueCustomerRelationshipManagementisa

customer-andvalue-based

companyorientation

withthegoalofbuildingupandfullybenefitingfrom

lastingandprofitablecustomerrelationships

throughholisticandindividualized

marketing,salesandserviceconcepts

usingstate-of-the-arttechnologiesCRMdefinitionIdentifyingthetopcustomersandexploitingthemaximumshareoftheirexpensebudgetsRaisingtheefficiencyofcustomermanagementEstablishingcustomerloyaltyand"lifetime"relationshipsFullyexploitingthepotentialcustomersegmentsbyacquiringnewcustomers

Therebyincreasing

thecompanyvalueCRMobjectives35Author/DivisionCRMisacustomer-andvalue-bCustomerRelationshipManagementdiffersfromclassicalmarketinginmanywaysTraditionalmarketingCustomerrelationshipmanagementObjectivesGeneratesalesCreatealoyalcustomerFocusAcquisitionphaseTotalcustomerlife-cycleTimeframeShorttermMediumtolongtermPerformanceindicatorsMarketshare,salesShareofwallet,customerprofitability,customervalueCustomerknowledgeDemandsfromcustomersegmentsIndividualpreferencesandneedsProductStand-aloneproductIntegrationofproductsandservicesPriceGeneraldiscountsPricedifferentiationonthebasisofcustomerloyaltySaleschannelsTraditionalsaleschannels(multi-level)"Disintermediation",multichannelmanagementCommunicationUnidirectionalcommunicationInteractivedialogwithcustomersandcommunities,

24hrs./7dayavailability36Author/DivisionCustomerRelationshipManagemeCRMistheholisticapproachtoacustomer-valuebasedcompanyorientation–fourenablerssetuptheframe...CreateGainUnderstandRetainORGANIZATIONSTRATEGYCULTURECRM-StrategyHolisticapproach/

top-managementissueDefinitionoftargetsegmentsandcustomersValue-basedprioritizationOrganizationandprocessesCustomer-orientedstructuresandprocessesCustomerprocess/touchpointinnovationOrganizationalanchoring

oftheCRMresponsibilityTECHNOLOGYTechnologySystemintegrationUseofe-technologiesSelectionofsystem/technologypartnersCulture

andchangemanagementConsolidatingthecustomervalueorientationManagementprocessesandincentivesystemsContinuouschangemanagementandimprovementprocessesCustomervalueCRMenablers37Author/DivisionCRMistheholisticapproachtCRMcreateslastingstrategiccompetitiveadvantages"Understand"marketsandcustomers"Create"superiorcustomeroffers"Retain"profitablecustomers"Gain"profitablecustomersBuildingupsuperiorcustomerknowledge

Identifyingtargetsegmentsanddeveloping

targetcustomerspecificmarketing,

salesandserviceconcepts

Focusingonthehighest-value

customersRaisingtheentrybarriersfor

competitorsbybuildingup

lastingrelationshipswiththe

customers

Developinga"learningrelationship"

inlong-termcustomerrelationshipsRaisingtheentrybarriersforcompetitorsthroughspecificproductandserviceoffersHighercompetitivebarriersbycoveringallsaleschannels

Loweringconflictpotentialthrough

theproactiveintegrationofthe

variouschannelsRaisingcustomers'costsofchangingsuppliersbycovering

allneedsCreateGainUnderstandRetainORGANIZATIONSTRATEGYCULTURETECHNOLOGYCustomervalue38Author/DivisionCRMcreateslastingstrategicMarketing-Mixarecoreelementsofcustomerrelationship

strategyMarketing-MixTargetMarketproductplacepricepromotionMarketing-Mixprovidesadecision-makingmethodfordecidinghow

tomanagethecustomerrelationshipDifferentiatedproducttargetingdifferentcustomersegmentProductcustomization:design,function,packagingServicelevelPricestrategy:e.g.chargepricepremiumforvaluablecustomersegmentPaymenttermsSpecialdiscountsSelectofMarketingCommunicationvehicletobetterreachtargetcustomer:TVads,PR,SponsorshipEventsforvaluablecustomersVIPclubEffectivechannelstrategy:one-to-onevisit,callcenter,stores…Variouschannelcombinationtomoreefficientlyservetargetcustomers39Author/DivisionMarketing-MixarecoreelementThethreemainapplicationareasofCRMOperationalCRMAnalyticalCRMCRMcomponentsCollaborativeCRMcampaignmanagementAutomaticallydistributionERP-integrationCustomerserviceDataMining/DataWarehouseP