Lamb, Hair, McDaniel CHAPTER 21 Customer Relationship Management 1 What is Customer Relationship Management (CRM)? • CRM is a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. It involves the following tasks. – Identify customer relationships – Understand interactions of the current customer base – Capture customer data – Store and integrate customer data – Identify the best customers – Leverage customer information CRM Elaborated • The central focus of CRM is to manage the Customer and Customer Relationship. And, to do so we need a CUSTOMER DATABASE. CRM focuses on: – Creating a customer database – Analyzing the database (data mining) – Leveraging information from the database • Few concepts: Lifetime Value Analysis, Predictive Modeling CRM Database Applications • Campaign management • Retaining loyal customers • Cross-selling other products or services • Designing targeted marketing communications • Reinforcing customer purchase decisions • Introducing product trials by new customers • Increasing effectiveness of distribution channel marketing • Improving customer service Ch 21 Discussion Questions 1. Define customer relationship management (CRM) and explain six different tasks associated with developing a CRM. 2. Explain/elaborate how a customer database can be created, analyzed and leveraged for marketing. 3. Explain CRM database applications.
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