Page 271 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes 11.3 CRM Measurement Frameworks

As discussed earlier, how a company measures its CRM activities depends on who is doing the
measuring and what activities are being measured. Below are the common CRM measurement
frameworks:
1. Brand-building
2. Customer equity building

(a) Customer behavioural modelling
(b) Customer value management
3. Customer-facing operations

(a) Marketing operations
(b) Sales force operations
(c) Service centre operations
(d) Field service operations
(e) Supply chain and logistic operations

(f) Website operations
4. Leading indicator measurement
(a) Balanced scorecards

(b) Customer knowledge management
Brand-building

The goal in brand building is to carefully manage a company’s name, brands, slogans and
symbols, otherwise known as brand equity. Various models (and criticisms) of brand equity
have been published over the years. The main challenge lies in how to quantify this important
intangible asset. David Aaker (1991) breaks down brand equity into the following components:

Brand loyalty This is a measure of the attachment a customer has to a brand. How likely is a customer
to switch to another brand?
Brand This is the ability of a potential customer to recognize or recall a brand as a member of a
awareness product category.
Perceived This is the customer’s perception of the overall quality of a product or service with
quality respect to its intended purpose and considering alternatives.
Brand This is anything that is linked, in the mind of the customer, to a brand. The association
associations also has a level of strength. An association can be a celebrity or person, a life style, a
geographic area, various product attributes, some customer benefit, a particular
application or use and any other intangible concept.

Brand loyalty can be measured quantitatively in a number of ways. So can brand awareness
through surveys and interviews. Many qualitative techniques are used to generate measures for
perceived quality and brand associations.
Companies can look at brand building as if they were managing an asset. Brand equity can be
calculated by removing from operating earnings attributed to a brand the cost of capital, taxes
and risk and then determining the value of the remaining number as a discounted cash flow
extending out five or more years (Schultz, 2001).

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