Page 101 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes  Service profit model is based on seven theorems, which says that customer loyalty is
linked with customer satisfaction and employee loyalty with employee satisfaction. But it
has been criticized by some on the grounds that the relation between satisfaction and
loyalty is not always linear.
CRM consists of three components: customer, relationship and management. The customer

is the only source of the company’s present profit and future growth.
The relationship between a company and its customers involves continuous bi-directional

communication and interaction. The relationship can be short-term or long-term, continuous
or discrete, and repeating or one-time.
CRM is not an activity only within a marketing department. Rather it involves continuous

corporate change in culture and processes. The customer information collected is
transformed into corporate knowledge that leads to activities that take advantage of the
information and of market opportunities.

CRM business cycle consists of four stages: acquisition and retaining, understand and

differentiate, develop and customize, and interact and deliver.
Analytical CRM integrates customer data coming in from various channels into a single

system to provide a decision-making platform. Such channels include the various
components of CRM systems - call centres, customer service automation, marketing
automation and sales automation.
Customer-relationship analytics take on the role of a highly sophisticated marketing

department. These tools identify your most valuable customers, group these customers
based on purchasing behaviour and other attributes, and target them with promotions
and sales efforts designed to increase customer loyalty and sales revenue.
Customer-relationship analytics is part of a growing effort to apply measurable and

actionable analytics to key parts of the business. Business performance management
applications now cover a range of key performance indicators, including sales, marketing,
finance and manufacturing.

A fundamental concept of Customer-Relationship Management is the lifetime value of a

new customer. The basic idea is that customers should be judged on their profitability to
the firm over the total time they make purchases.
5.8 Keywords

Conformance: Delivery quality meeting design standards.
CRM: managing of prospects all the way through the entire sales process and after.
Customer Lifetime Value: The profitability of a customer over the period of a business relationship;
can include multiple transactions and purchases.
Customer Relationship Analytics: set of tools to perform reporting, analysis and data mining.
ERP: helps a manufacturer or other business manage the important parts of its business.

Return on Capital Employed: establishes the relationship between the profit and the capital
employed.
Service Profit Chain: measures relationship between loyalty, satisfaction and profitability.

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