What are the advantages of CRM?
Reduces advertising costs, makes it easier to target specific customers by focusing on their
needs, makes it easier to track the effectiveness of a given promotional campaign, allows
organization to compete for customers based on service not price, prevents overspending
on low-value customers or underspending on high-value customers, speeds the time it
takes to develop and market a product, improves use of the customer channel
What is the lifetime value of a customer concept? How does it influence sellers?
The lifetime value of a customer measures the returns from CRM including cost savings,
revenue growth, profits, referrals and other business success factors. The concept
influences the CRM process where sellers continually go through a four-step process:
knowledge discovery, market planning, customer interaction, analysis and refinement. It
can also lead to situations where a marketer may fire a customer who will likely not create
lifetime value.
What questions does an organization need to address in order to improve the effectiveness
of CRM initiatives?
Who are the customers? What do they want and expect? What is their potential value?
To build a relationship-based enterprise and to improve the effectiveness of CRM,
managers need to address questions in what three areas?
Customers, relationships and managerial decision making.
What is customer relationship management?
Any application or initiative designed to help a company optimize interactions with
customers, suppliers, or prospects via one or more touchpoints… for the purpose of
acquiring, retaining, or cross-selling customers. It is both a business philosophy and a
programmatic, integrated implementation system.
What are touchpoints? Where do they most often take place?
Touchpoints are the intersection of the selling firm and the customer, allowing for
information about the customer to be collected. They can take place through call centers,
salesperson, distributor, store, branch office, Web or e-mail.
Preferred supplier status represents
Attainment of market share dominance
Successful TQM marketing strategy
Functional relationship superiority
Transformational security