Customer Relationship

Management
 Type
There are fourof Customers
categories of customers :
 Those who are resistant to change

 Those who perceive the company’s product

as being good value for money at its existing
price.
 Customers who perceive company’s offer a
batter value for money than competition.

 Customers who like the company and its

offer because they see or as reflecting their
needs and aspirations and meeting their
expectations.
The 80/20 Principle

80/20
80/20 20/8020/80

Sales
Sales SalesSales
(customer)
(customer)
(customer )
(customer )
 Focus of Market Leading
 Enhancing Customer Loyalty

 Maximizing returns on customer

segments or customer accounts
 Creating strong interdependence
between the customer and the company
 Customer Loyalty
Loyal customers are more profitable because:
 They are willing to pay a premium
 Loyal customers help in acquiring new
business.
 Cost savings
 Acquisition cost of new business goes down
 Loyal customer’s buy basket of products from
the same source
 Customer loyalty and
perceived value
Customer Loyalty Gets Enhanced with
High Perceived Value Maximization

Perceived
Value
Maximization

Low

Low Customer Loyalty High

 Loyalty Based Business
Model
Customer Acquisition Customer
Loyalty
Higher Cash
Reserves and
Investments Superior Customer
Values Growth in Sales and
Motivated Market Share
Cost Employees
Advantage

Investor Enhanced Compensation

Loyalty Investors
Confidence
Higher Profits
 Strategies for customer Loyalty
Development

Three Stages of Loyalty :

 Customer acquisition
 Customer retention and
 Strategic Customer care
 Customer Lifetime Value
High
Strategic Customer Care

Customer CRM Curve

Loyalty

Customer Retention

Customer Acquisition
Low
Low High
 Profitability and loyalty
enhancement strategies

Strategic Customer
Low Customer Retention
Care

Profitability
Customer Retention
Acquisition
Strategy
High

Low High
Loyalty
 Customer Value
Management
High

Individual
Customer in Institutional
Value a Bank Customer in
Sought a Bank

Low
Low High
Size of Customer Value or the Business
 The CRM process
Data Mining and People
Warehousing

LOYALTY

Technology
 Web
Structure
 Voice Mail
 Alliances
 Telephone
 Call Centers