Page 335 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes Data, when analysed and used effectively, can provide the organization with:
 Refined and sophisticated methods of customer acquisition;
 Reduced direct marketing costs with higher return on investment; and
 Increased insight into developing marketing communications that are targeted and
relevant.

12.3.3 Creating Customer Value

Intelligent data analysis provides the mechanisms for managing meaningful relationships with
your customers. Data analysis can direct the design of marketing communications, the
management of quality service delivery, establish a basis for ongoing dialogue, the development
of quality products and the outcome that translate into long-term profitable relationships with
the only sources of sustainable revenues: customer revenues. Four ways of creating a customer’s
value are specified as under:
Stage 1: Define your Customers’ Actions
The first stage in creating customer value is to understand your customer base. Analysis of
existing data can provide information about segmentation, behavioural characteristics, and
profitability and churn rates that create an understanding of your customers.
Stage 2: Determine your Customers’ Expectations

Expectations, while difficult to manage, are often the cause of dissonance that results in loss of
customers. Understanding the needs and wants of customers with regard to your service delivery
levels and product quality is essential if ongoing, mutual value and enduring relationships are
to be established.
Stage 3: Design the Customer Value Model
The combined understanding of customers’ behaviour, needs and wants, the customer value
model will seek to deliver the value in most cost-effective manner. Defining the customer’
journey, performance measurements and product offerings will be critical at this stage.
State 4: Deliver Customer Value Model
Implementing the integration of systems, processes, service providers, business technology and
infrastructure in addition to the creation of measurement systems to monitor progress
12.3.4 Delivering the Benefits of CRM

The old adage about the customer always being right is often treated with contempt in modern
businesses. We all know of companies where the customer appears to be very much in the way
of getting on with the “real” work.
A clear understanding of the business and its operations is critical to the success of a CRM
strategy. Even after accepting that CRM is wider than sales, many organizations are still unaware
of its full impact across the organization or to know where improvements can be made.
The following processes are an integral part of any CRM strategy:
 Product development Inventory management

 Channel management, Customer service
 Marketing planning, Customer billing and invoicing

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