Session 1 - CRM

8/7/2019 Session 1 - CRM

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Session 1

Friday, February 18, 2011

CRM


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Today!!!y Introduction & Course Structure

yRules of the Game

yLets go to the Future 1

st

The SocialNetwork (Class Exercise)

yConcept of Customer Value

y& Anecdotes(Share stories)


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Introduction

Re-Introduction

Course Structure

Rules of the Game

RM 2 CRM


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Everything & everyone has an

expiry date So does he


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Lets go to the future

1styThe Social Network (Class Exercise)

y

Part I Avatars & Passion Tags


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LessonsyWho is most connected?

yNetwork around average interests

y

Who had the pen for the longest timeyLeast connected Why?

y Star, Flower Power? Pets?

yBrands? Marketers should be happy orworrisome


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y

Part II Brand TagsyWhere did you discuss this, what was the

trigger?

y

Clusters Can you cluster them someway?


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LessonsyThe most common clustering technique

yWhy?

yWhat is there in for a marketer?


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y

Part III Let us make a small brand strategyyBrand Values (passions/nouns), Brand

persona (adjectives Our brand is ____ ) &

Evangelist passion tags Find the linkyFuture is Social CRM

yNow let us go back to the Kotler era


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Anecdotes Share

your CRM StoriesyHow are you Mr. Singh? Or Mrs. Kapoor?

Or whatever CRM is beyond thatyLet us learn from our experiences


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ValueMarketing

It is no longer enough to satisfycustomers

You must delight them


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Our goal as a company [Wal-Mart] is to have customer service that is not just

the best, but legendary.

Sam Walton

The only job security anybody has in this company [Chrysler] comes from

quality, productivity, and satisfied customers.

Lee Iacocca

Look at our balance sheet. On the asset side, you can see so-and-so many

aircraft worth so-and-so many billions. But its wrong; we are fooling

ourselves.What we should put on the asset side is, last year SAS carried

so-and-so many happy passengers. Because thats the only assetweve got-people who are happy with our service and willing

to come back and pay for it again.

Jan Carlzon, SAS Arlines


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Then Vs NowEarlier

yHow companies

can outperformcompetition if they

can move from a

product and sale tomarketing

philosophy

Now

yHow companies go

about winningcustomers and

outperforming

competition


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McDonalds Way

y38 mn people visit its 23,500 outlets in 109

countries

yEven when there are better tastinghamburgers elsewhere

yValue Proposition

yQSCV Quality, Service, Cleanliness andValue


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Value: Benefit vs. Cost

Benefit

Bundle of benefitscustomers expect from

a given product or

services/offerings

Cost

Bundle of cost customers

expect to incur in

evaluating, obtaining and

using the product,

service/offerings

Value =B

enefit-Cost


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Product value

Services value

Personnel valueTotal Customer Value

Image value

Monetary cost

Time cost

Energy cost

Total Customer

Cost

Psychic cost

Determinants of Customer Delivered Value


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Customer Satisfaction

Satisfaction of a persons feelings of pleasure or

disappointment resulting from comparing products

perceived performance (outcome) in relation to his or

her expectations

Ciga

We will never be 100% satisfied until you are too.

Honda

One reason our customers are so satisfied is that we are

not


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Customers Satisfaction:Tools

for Measuring & Tracking

Complaints &Suggestion

Systems

System Illustration

Jet Airways mid-air

Customer

Satisfaction System

Periodic Surveys

Ghost Shopping

Lost Customer

Analysis

Retail Trade

Mobile


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Product Performance: Customer Response

CustomerP

roductP

erformance

Satisfaction

Loyalty-Switch

Marketing Effect

Short Matches Surpasses Not Expected

Dissatisfied Satisfied Full Delighted

None Low High Very High

Negative Good

Opinion

Word of

Mouth

Recommends


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ValueCreatingActivities

5Prime

y Inbound Logistics

y Outbound Logistics

y Operations

y Marketing

y Servicing

4 Supporting

y Infrastructure

y HR

y Technology

y Procurement


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Levi Strauss

ValueDelivery Network

Du Pont

(Fibres)

Milken

(Fabric)

Levis

Apparel

Sears

Retail

Customer

`

Competition is between value networks not companies


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Core Business Processes

y New Product Realization

y Inventory Management

y Order to remittances

y Customer Service Process

y Researching, Developing andlaunching within budget andquickly

y All activities related so that

optimal supplies are availableand costs of overstocks arelow

y Receiving and processing andapproving on time and

collecting payment on timey Translating order in to sales

and making it easy forcustomers to get satisfactoryservice


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Cost

Retention vs. Acquisition


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Acquisition vs. Retention

yAcquisition

yRetention


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Customer Acquisition Cost

yCost of an average call

(including salary, commission, benefits and

expenses, advertising and promotion) = Rs.5000/-

yAverage no of calls to convert an average

prospect in to a customer= 4yCost of acquiring a new customer= Rs.

20,000/-


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Customer LifetimeValue

yAnnual average customer revenue= Rs.

10,000/-

yAverage no of yrs a customer remainsloyal= 2 yrs

yTotal revenue earned in 2 yrs.=Rs.20,000/-

yCompanys profit margin= 10%yCustomer life time value=Rs.2000/-


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InternalAssessment

y Do customers defect at different rates during the year

y Does retention vary by office, region, specific channel,sales representation

y What is the relationship between price change andretention rates

y What happens to a lost customers and where do theyusually go and why

y What are the retention rates in a sectory Which company has longest and highest retention rates

and why


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Retention ResearchInternal

y Pricing

y Sales

y Territoryy Sales Representatives

External

y Industry association

y Competitor Pricing

y Competitor Market Share


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When customers leave- Analysis

y Definition of Retention Rate

y Distinguishing causes ofattrition

y Measurability of Retention

Ratey Estimation of how much

profit is lost due to customerattrition

y Estimate how much it wouldcost to reduce the defectionrate

y Publication-Renewal Rate

y Poor Service,High Price

y

Time value- PV of Lost profitduring life time of a customer

(had it not been lost)

y Cost of reducing defection

rate should be lower than the

lost profit


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Cost ofLost Sales-Computation

y Bank has 50,000 accountsy Bank lost 5% of its accounts last year due to poor

service

y No of lost a/cs= 2500 (=5% x 50,000)y The average a/c = Lost Revenue= Rs.5000/- per

a/c

y

Lost sales Rs.125 lacsy Profit Margin=10%

y Profit lost=Rs.12.5 lacs


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Marketing Strategy for

Retention

High Switch Barriers

y High Capital cost

y Loss of discount

y Loss of after sales service

contract

y Warranties

High Customer

Satisfaction

y Lower Price

y

Lower Costy Value for Money

y Relationship Marketing

High Customer

Satisfaction

y Lower Price

y

Lower Costy Value for Money

y Relationship Marketing


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Irrespective ofWhat I said Today,

You will have to read

K.O.T.L.E.R.anyways!!!

Thank You!!!

Session 1 - CRM

Documents

Transcript of Session 1 - CRM