Course Title Instructor: Managing Customer Experience and Relationships: A Strategic Framework
Course Title Instructor: Managing Customer Experience and Relationships: A Strategic Framework
Course Title Instructor: Managing Customer Experience and Relationships: A Strategic Framework
Instructor
Chapter 1
Evolution of Relationships with Customers and Strategic Customer Experiences
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
1 Rogers
Introduction
From the Industrial Age to the Information Age, the
customer-enterprise relationship has changed
Industrial Age businesses structured around:
Competitive advantage from product innovation
Assembly-line technology: mass production and mass
distribution
Mass media and branding
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
2 Rogers
Introduction
Information (Interactive) Age businesses structured
around:
Customer information as competitive advantage
Interactive technologies
Two-way brands or branded relationship
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
3 Rogers
Roots of Customer Relationship
Management
If customers are key to competitive advantage, the
main task of the enterprise becomes growing the value
of the customer base.
To grow the value of the customer base, the enterprise
must get, keep, and grow customers.
This kind of customer relationship management is an
enterprise-wide strategy, not merely the
implementation of the right technology or a quick add-
on to one department.
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
4 Rogers
Roots of Customer Relationship
Management
Definition of customer relationship management:
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
5 Rogers
Roots of Customer Relationship
Management
The role of technology:
Although many believe CRM is a synonym for software,
customer strategy involves analytical as well as
operational processes.
Technological advancements in interactivity, such as the
Internet, mobile technologies, and social media, have
driven the growth capacity of CRM, but such technology
is a means of managing customer relationships, not the
end in itself.
6 Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
Traditional Marketing Redux
The Four Ps of traditional marketing focus on the
“get” portion of “get, keep, and grow” customers.
Product
Place
Price
Promotion
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
7 Rogers
Market Share vs. Share-of-Customer
Strategies
Makes sure each product is profitable, even if loses money on occasional product
or transaction
even at expense of customer confidence
Uses interactive communication to
Uses mass media to build brand and
determine needs and communicate
announce products individually
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
8 Rogers
Learning Relationship: Definition
9 Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha Rogers
Benefits of Learning Relationship
Customer loyalty
The customer learns more about his or her preferences
The enterprise learns more about its own strengths and
weaknesses
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
10 Rogers
The Technology Revolution and the
Customer Revolution
Increased enterprises’ ability to connect with
customers one-to-one
Increased customers’ expectations to be treated as an
individual
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
11 Rogers
Where Is a Firm on the Customer Strategy
Map?
Quadrant
Quadrant IV
III 1to1Learni
Database ng
Marketing Relationshi
Interacting ps
Quadrant I Quadrant II
Mass Niche
Marketing Marketing
Tailoring
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
12 Rogers
Customer Retention and Enterprise
Profitability
Reichheld and Sasser (1990) found that a customer’s
profitability increased with length of retention, based
on four factors:
1. Increased purchases
2. Reduced operating costs
3. Referrals to other customers
4. Price premium (conversely, new customers usually
pay lower introductory prices)
Additional benefit of retention: acquiring new
customers is costly
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
13 Rogers
Becoming a Customer-Strategy Enterprise
Becoming a customer-strategy enterprise requires a
unified view of the customer across the five principal
business functions:
1. Financial
2. Production, logistics, and service delivery
3. Marketing communications, customer service, and
interaction
4. Sales distribution and channel management
5. Organizational management strategy
Managing Customer Relationships: A Strategic Framework, Third Edition, Don Peppers and Martha
14 Rogers