Page 297 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes Customer Equity: It is the Net Present Value of a customer from the perspective of a supplier.
Customer Knowledge: It refers to understanding your customers, their needs, wants and aims is
essential if a business is to align its processes, products and services to build real customer
relationships.
Customer Value Analysis (CVA): CVA compares price and quality (or value) of a product against
competitors.
Lifetime Customer Value: It is a reflection of the possible future business a company can expect
from a loyal customer.

Periodic Revenue: The amount of revenue collected from a customer in the period.
Profit Margin: Profit as a percentage of revenue. Depending on circumstances this may be
reflected as a percentage of gross or net profit. For incremental marketing that does not incur
any incremental overhead that would be allocated against profit, gross profit margins are
acceptable.

11.9 Review Questions

1. What do you understand by CRM measurement?
2. Discuss the various criteria of CRM measurement framework.
3. What are the attributes of CRM measurement framework? Discuss.
4. What is customer life time value? How will you calculate customer life time value?

5. Define customer equity. Describe the drivers of customer equity.
6. What do mean by customer satisfaction?
7. How will you calculate customer defection?

8. What is meant by scoreboard?
9. What are the uses of LTV?
10. Discuss customer knowledge management.

Answers: Self Assessment

1. Future 2. CRM metrics
3. Complex 4. Objective

5. Customer 6. Measuring; measured
7. An asset 8. Monitoring
9. First framework 10. Vavra Model
11. Cant Really Measure 12. Thomas et al.

13. Attributes or vectors 14. Customer Lifetime Value
15. Value; brand; retention

292 LOVELY PROFESSIONAL UNIVERSITY