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EXAM #2
Thursday, 3/27
Chapters 6,7,8,9,11 (not 10)
Chapter 11
CUSTOMER RELATIONSHIP
MANAGEMENT
Customer Relationship Management
 It costs 3 to 6 times more to sell products and
services to NEW customers as it does to sell
to existing customer
 GOAL = increase “share of wallet”
Customer Relationship Management
 Strategies
 Programs
 Systems
Focus is on identifying and building loyalty
with a retailer’s most valued customers
Loyalty
 Emotional connection
 Based on personal attention
 Exclusive or individually tailored offers or
merchandise
CRM Process
 LEARN
 Collect customer data
 Analyze Customer Data
 ACTION
 Develop CRM program
 Implement CRM program
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Collecting Customer Data
 Transactions
 Customer contacts
 Customer preferences
 Descriptive information
 Responses to marketing
CUSTOMER
DATABASE
Example: Harrah’s casino
 Rewards program
CUSTOMER
DATABASE
 Purchase prediction
 Integration
Identifying Info
 Ask during purchase
 Frequent shopper card
 Internet purchasing
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Privacy
 Protection of personal
information and
transaction history
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Analyze Customer Data
 Identify Segments
 Identify Best
Customers
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Customer Profile (Personas)
Customer Pyramid
Developing CRM Programs
 Customer retention
 Converting good
customers
 Getting rid of
unprofitable
customers
Customer Retention
 Frequent shopper
program
 Special customer
services
 Personalization
 Community
Converting Good Customers
 Cross-selling
 Add-on selling
Dealing with Unprofitable Customers
 High level of returns
 Not loyal
 Offer less costly
services
 Charge customers
fees for abused
services
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Implementing CRM Programs
 Close coordination
 MIS
 Sales/Marketing
 Operations (store)
 Human Resources
 Currently retailers are
organized by product,
not customer type
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EXAM #2
Thursday, 3/27
Chapters 6,7,8,9,11 (not 10)