MARKETING MANAGEMENT

Chapter 15
CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Chapter 15 Customer Relationship Management (CRM)

THE CRM RULE BOOK

Rule 1 The customer is always right Rule 2 If the customer is ever wrong, re-read Rule 1.S

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 15 Customer Relationship Management (CRM)

The Customer-Focused Business

Customers are the focus of all activities. Customers find it easy to do business with you. Customers views influence business decisions. Customer-friendly systems and structures are used. Customers are the focus of all business plans and activities. Customers appear at the top of the organizational chart (if you really must have one).

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 15 Customer Relationship Management (CRM)

Losing Customers
1% 3% 4% 5% 9% 10% 68% Die Move away to new location Are natural floaters Move on recommendation of family or friends Find somewhere cheaper Are chronic complainers Go elsewhere because the people who serve them are indifferent to their needs. They just dont care!

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 15 Customer Relationship Management (CRM)

The Leaky Bucket Theory

The leaky bucket depicted below portrays two companies. Each company is working hard to generate new customers each year and has managed to generate 10 percent more new customers per year, perhaps by developing new services or targeting new segments. However, not all of the new customers acquired by the firm in a given year stay with the firm. The retention rate is not 100 percent there is a hole in the bucket. For company A, the hole is small and the company loses only 5 percent of its customers each year. As a result, after 14 years, company A has doubled the number of its customers. Company B has a bigger problem, because retention is 90 percent and the hole in the bucket is 10 percent. As a result, company B loses and gains customers at the same rate.
Himalaya Publishing House Marketing Management Dr. K. Karunakaran

Chapter 15 Customer Relationship Management (CRM)

Five Common Perception Gaps

1.
2. 3. 4. 5.

The gap between what the company thinks the customer wants and what the customers actually want. The gap between what the company thinks the customer has bought and what the customers perceive they have received. The gap between the service quality the company believes is being provided and what the customer perceives as being provided. The gap between the customers expectation of service quality and the service quality the company actually delivers. The gap between the marketing promises and the companys actual delivery.

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 15 Customer Relationship Management (CRM)

Customer Service Centre

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran

Chapter 15 Customer Relationship Management (CRM)

The wrong way of avoiding customer complaints

Himalaya Publishing House

Marketing Management Dr. K. Karunakaran