Chapter 15: Customer Relationship Management

relationship capital
a firm’s ability to build and maintain relationships with customers, suppliers, and partners: the total value of these relationships to a firm in the long term is its relationship capital
relationship marketing
the process of establishing, maintaining, enhancing, and commercializing customer relationships: its long-term customer orientation involves ongoing interactive communication between a firm and selected stakeholders an focuses on individual customers 1:1
wallet share
the amount of sales a firm can generate from one customer over time, which reflects the focus on customer retention versus acquisition (market share)
customer relationship management (CRM)
CRM is the process of targeting, acquiring, transacting, servicing, retaining, and building long-term relationships with customers that add value both to the organization and to the customer
customer experience management (CEM)
CEM “represents the discipline methodology and/or process used to comprehensively manage a customer’s cross-channel exposure, interaction and transaction with a company, product, brand or service”
customer collaboration management (CCM)
CCM is a strategy to engage customers in relationship-building conversation, often through social media
social CRM (CRM 2.0)
this strategy retains all the tenets of CRM 1.0, however, adds social media technology and customer collaborative conversations to the process
structural bonds
relationships created when firms add value by making structural changes that facilitate the relationship with customers and suppliers
learning relationship
a learning relationship between a customer and an enterprise that gets smarter and smarter with each individual interaction, defining in ever more detail the customer’s own individual needs and tastes
customization
the third step in the CRM process (identify, differentiate, and customize) in which firms tailor their marketing mixes to meet the needs of small target segments, even to the individual level, using electronic marketing tools; sometimes refers to technology that allows consumers to cater the Web site to suit their own needs
personalization
methods of individualizing an impersonal computer networked environment (e.g., Web sites that greet users by name, providing personalized information)
marketing automation
these are activities aiding marketers with effective targeting, efficient marketing communication, and real-time monitoring of customer and market trends
share of mind
refers to relationship marketing focusing on customer development in the long term: maintaining and enhancing. a firm using this kind of relationship marketing differentiates individual customers based on need rather than differentiating products for target groups
Web analytics
tools that collect and display information about user behavior on a Web site
iPOS terminals
small customer-facing machines near the brick-and-mortar cash register, used to record a buyer’s signature for a credit card transaction
search engine
a Web site that scans the Web, searching for matches for the user’s keywords, and returns a list of Web sites that might have the desired information
fax-on-demand
customers telephone a firm, listen to an automated voice menu, and through selecting options request that a fax be sent on a topic of interest
customer lift
increasing the response rates from promotions; increasing transaction rates
customer lifetime value
“LTV” is the expected profit that a company will realize from sales to a particular customer in the future