Marketing bán hàng - Chapter 11: Customer relationship management

Chapter 11Customer Relationship ManagementInformation SystemsRetailing StrategyRetail Market StrategyFinancial StrategySite LocationRetail Locations Customer RelationshipManagementOrganizational Structure and HR Management2Customer Relationship ManagementA business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty with a retailer’s most valuable customers.What is loyalty? Is it the same thing as liking a retailer or frequently patronizing a retailer?3Customer LoyaltyCommitted to purchasing merchandise and services from a retailerResist efforts of competitors to attract the loyal customerEmotional attachment to retailerPersonal attentionMemorable positive experiencesBrand building communications programs4Can Offering Discounts Achieve Customer Loyalty?No! Retail strategies like these can be copied by competitors These strategies encourage customers to be always looking for the best deal rather than developing a relationship with a retailerMcGraw-Hill Companies, Inc./Gary He, photographer5CRM Process6Information About Each Customer in the DatabaseHistory of purchasesPurchase date, price paid, SKUs bought, whether or not the purchase was stimulated by a promotionCustomer contacts by retailer (touch points) --visits to web site, inquires to call center, direct mail sent to customerCustomer preferencesDescriptive information about customerCustomer’s responses to marketing activities7Approaches for Collecting Customer InformationNeed to connection contacts with a specific customer identifierAsk for identifying informationTelephone number, name and addressEncourage use of frequent shopper cardsLink checking account number and/or third party credit cards to customer8Privacy ConcernsControl over CollectionDo customers know what information is being collected?Do customers feel they can decide on the amount and type of information collected by retailers?Control over UseDo customers know how the information will be used by the retailer?Will the retailer share the information with third parties?Steve Cole/Getty Images9Frequent Shopper Cards Card is often squeezed out of wallet Customers forget to bring it to the store Might not even show it if in a hurry(c) image100/PunchStock10Heighten Concerns When Using Electronic Channel Information collected without the awareness of customers Collecting click stream data using cookies Similar to an invisible person videotaping a customer as theywalk through a storeStockbyte/Punchstock Images11Customer’s Decision to Offer InformationBalance benefits and risks DiscountsSpecial TreatmentPersonal Attention Disclosure of InformationUnwanted Sales Contacts12Consumer Protection DifferencesUnited StatesLimited protection in specific areasCredit reportingVideo rentalsBankingMedical recordsEuropean UnionInformation only can only be collected for specific purposesPurpose must be disclosed to customerInformation can only be used for specific purposeInformation can not be exported to countries with less stringent regulations13FTC Guideline for Fair Information PracticesNotice and awarenesscomprehensive statement about information storage, manipulation, and disseminationChoice/consentOpt-in and opt-out optionsAccess/participationCustomer able to confirm accuracyIntegrity/security Controls for theft and tamperingEnforcement/redressMechanism to insure compliance14J.Crew Security and Privacy Policy15Analyzing Customer Data Data Mining – technique used to identify patterns in data. Market Basket Analysis Identifying Market Segments Identifying Best CustomersRyan McVay/Getty Images16Market Basket Analysis Data analysis focusing on the composition of the customer’s market basket – what items are bought during a single shopping occasionUses:-Adjacencies for displaying merchandise-Joint promotionsBurke/Triolo Productions/Getty Images17Market Basket Analysis Taught Wal-Mart to Change!Product Placed NearBananas cornflakes, produceKleenex paper goods, cold medicineMeasuring spoons housewares, Crisco shorteningFlashlights hardware, Halloween costumesLittle Debbie snack cakes coffeeBug spray hunting gear18Identifying Best CustomersEstimating Lifetime ValueBased on assumptions that the customer’s future purchase behaviors will be the same as they have been in the pastClassifying Customers by recency, frequency, and monetary value of purchases (RFM Analysis)(c) Brand X Pictures/PunchStock19Which Customer Probably Has the Greatest Lifetime ValuePurchases Over Last 10 Weeks20Customer Pyramid PlatinumBestMost loyalLeast price sensitive21Customer Pyramid GoldNext bestNot as loyal22Customer Pyramid IronDoesn’t deservemuch attention23 Customer Pyramid LeadDemands attentionMay havenegative value24RFM Analysis25RFM Target Strategies26Illustration of RFM ApplicationA catalog retailer is deciding which group of customers to send a catalog.. Based on experience and an RFM analysis of customer database:Average order size for customers in cell - $40Contribution margin – 50%Response rate – 5%Cost of catalog and mailing -$.75Will the retailer make a profit mailing to this RFM segment?27Illustration of RFM ApplicationA catalog retailer is deciding which group of customers to send a catalog.. Based on experience and an RFM analysis of customer database:Average order size for customers in cell - $40Contribution margin – 50%Response rate – 5%Cost of catalog and mailing -$.75 Will the retailer make a profit mailing to this RFM segment? $20.00 contribution x .05 response rate - $.75 cost = $.25 profit per catalog mailed 28CRM ProgramsRetailing Best CustomersConverting Good Customers to Best CustomersGetting Rid of Unprofitable Customers29Customer Retention ProgramsFrequent Shopper ProgramsSpecial Customer ServicesPersonalization 1-to1 RetailingCommunityRoyalty-Free/CORBIS30Elements in EffectiveFrequent Shopper ProgramsTier Based on Customer ValueOffer Choices of RewardsNon-monetary incentivesReward all TransactionsTransparent and Simple31Issues with Effective Frequent Shopper ProgramsExpenseDifficulty in Making ChangesImpact on Loyalty QuestionableEasily Duplicated – Difficult to Gain Competitive AdvantageNeed to offer “invisible” benefits32PersonalizationHello, Barton Weitz33Dealing with Unprofitable Customers Offer less approaches for dealing with these customers Charge customers for extra services demandedDon Farrall/Getty Images34Implementing CRM ProgramsNeed systems, databases Close coordination between departments – marketing, MIS, store operations, HRShift in orientationProduct Centric Customer Centric35