CRM value creation process case study
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CRM value creation process case study
ChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study n hold that successful customer relationship management (CRM) is based on the company and rhe customer exchanging ‘value’ rather than money, goods and services. Companies now pay more attention to ‘value’ and how to create, convey and exploit it better.Managers and researchers agree that value plays CRM value creation process case study a key role in building and sustaining vital customer relationships, and are increasingly interested in learning how to balance the value organizationCRM value creation process case study
s give to and receive from customers.As we outlined in Chapter 2, the value creation process consists of three key elements: determining what value thChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study anization receives’); and, by successfully managing this value exchange, maximizing the lifetime value of desirable customer segments.To many companies, customer value means:■ I low much money can we extract from customers?■ How can we sell them more of the existing products and services they are bu CRM value creation process case study ying?■ How can we cross-sell them new products and services?But in today’s competitive arena, where a growing number of businesses vic for a greater sCRM value creation process case study
hare of a finite customer pool, organizations also have to consider customer value in terms of customer benefit, Ĩ.C.:■ I low can we create and deliveChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study ensure the customer experience is consistently positive?The aim of all businesses is to create a value proposition for customers, which, implicitly or explicitly, is better and more profitable than those of competitors.Building the value proposition for target customersCopyright o 2092 Routledge All CRM value creation process case study rights reserved.A ‘value proposition’ is the offer defined in terms of the target customers, the benefits offered to these customers, and the price cCRM value creation process case study
harged relative to the competition. Value propositions explain the relationship between the performance of the product, the fulfilment of the customerChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study customers, the benefits offered to these customers and the price charged relative to the competition. To determine whether the value proposition is likely to result in a superior customer experience, firms must quantify the relative importance customers accord to the various attributes of a product. CRM value creation process case study Hie value the supplier receives from the customer is the outcome of providing and delivering superior value to the customer; deploying improved acquisCRM value creation process case study
ition and retention strategies; and utilizing effective channel management. Fundamental to this concept of customer value is understanding the economiChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study r acquisition varies considerably according to a company’s specific situation, l or example, a new entrant to the fast-paced world of e-business will focus primarily on acquiring customers, while an established manufacturing company in a mature market may be more concerned with keeping customers.Des CRM value creation process case study pite the fact that it costs much more to ger a new customer than it does to keep an existing one, many companies have traditionally focused their markCRM value creation process case study
eting activity on acquiring new customers, rather than retaining existing customers. This may be due to the historical convention in many companies thChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study ld and Sasser (1990) suggested a number of reasons for which customer retention has such an effect on profitability.■ Acquiring new customers involves significant costs which may take years to turn into profits.The value creation processCopyíiỊlilt ■© 2092 RomlMígc All rights reserved.■As customers CRM value creation process case study become more satisfied and confident in their relationship with a supplier, they are more likely to give the supplier a larger proportion of their busiCRM value creation process case study
ness, or ‘share of wallet'.■As the relationship with a customer develops, there is greater mutual understanding and collaboration, which produces effiChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study those of their suppliers, and this further reduces costs.■Satisfied customers are more likely to refer others, which promotes profit generation as the cost of acquiring these new customers falls dramatically. In some industries, customer advocacy can play a very important role in winning new custom CRM value creation process case study ers, particularly when choosing a supplier is a high-risk activity.■Loyal customers can be less price-sensitive and may be less likely to defect due tCRM value creation process case study
o price increases. This is especially true in business-to business markets where the relationship with the supplier becomes more valued and switching ChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study nd its links with profitability, very few measure the economic value of their customer retention strategies. Customer acquisition and customer satisfaction are measured much more often than customer retention and profit per customer.Enhancing customer retention involves taking action. Key elements i CRM value creation process case study nclude: marshalling top management commitment; ensuring employee satisfaction and dedication to building long-term customer relationships; utilizing bCRM value creation process case study
est practice techniques to improve performance; and developing a plan to implement a customer retention strategy.Increasingly, firms are recognizing tChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has taken CRM value creation process case study ways to boost retention to boost business performance. This often entails a fundamental shift in business emphasis from customer acquisition to customer retention. Achieving the benefits of longterm customer relationships requires a firm commitment by everyone in the business to understanding and se CRM value creation process case study rving the needs of customers.To calculate a customer’s real value a company must look at the projected profit over the life of the account. This repreCRM value creation process case study
sents the expected profit flow over a customer’s lifetime. The key metric used here is customer lifetime value (CLV), which is defined as the net presChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has takenChapterThe value creation processCopyfight o 2092 Routledge All rights reserved.The role of value creation in business has grown as the idea has takenGọi ngay
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