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![[PDF] Customer Relationship Management Second Edition](https://pdfprof.com/PDF_DocsV2/Docs/PDF_9/30013_9customer_relationship_management.pdf.jpg "[PDF] Customer Relationship Management Second Edition")
Customer Relationship Management
VSF This book is dedicated to my children Emma and Lewis of whom I am enormously proud.Customer
Relationship
Management
Concepts and Technologies
Second edition
Francis Buttle
AMSTERDAM BOSTON HEIDELBERG LONDON NEW YORK OXFORD PARIS SAN DIEGO SAN FRANCISCO SINGAPORE SYDNEY TOKYOButterworth-Heinemann is an imprint of Elsevier
Butterworth-Heinemann is an imprint of Elsevier
Linacre House, Jordan Hill, Oxford OX2 8DP
30 Corporate Drive, Suite 400, Burlington, MA 01803, USA
First edition 2009
Copyright © 2009, Francis Buttle
Published by Elsevier Ltd. All rights reserved.
The right of Francis Buttle to be identi ed as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Permissions may be sought directly from Elseviers Science & Technology Rights Department in Oxford, UK: phone (44) (0) 1865 843830; fax: (44) (0) 1865853333; email: permissions@elsevier.com. Alternatively you can submit your
request online by visiting the Elsevier web site at http://elsevier.com/locate/ permissions, and selecting Obtaining permission to use Elsevier material.Notice
No responsibility is assumed by the publisher for any injury and/or damage t o persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent veri cation of diagnoses and drug dosages should be made.British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of CongressISBN: 978-1-85617-522-7
For information on all Butterworth-Heinemann publications visit our web site at www.elsevierdirect.comTypeset by Charon Tec Ltd., A Macmillan Company.
(www.macmillansolutions.com).Printed and bound in Hungary
09 10 11 12 13 10 9 8 7 6 5 4 3 2 1
Contents
Foreword xi
Preface xiii
Acknowledgements xvii
About the author xxi
1 Introduction to customer relationship management 1
Chapter objectives 3
Introduction 3
Strategic CRM 4
Operational CRM 6
Analytical CRM 9
Collaborative CRM 11
Misunderstandings about CRM 12
D e fi ning CRM 14
CRM constituencies 16
Commercial contexts of CRM 17
The not-for-profi t context 18
Models of CRM 18
Summary 22
References 22
2 Understanding relationships 25
Chapter objectives 27
What is a relationship? 27
Relationship quality 30
Why companies want relationships with customers 31 Why companies do NOT want relationships with customers 40 Why customers want relationships with suppliers 41 Why customers do NOT want relationships with suppliers 42 Customer satisfaction, loyalty and business performance 43Researching the satisfaction-profi t chain 46
Relationship management theories 50
Summary 55
References 55
3 Planning and implementing customer relationship
management projects 61Chapter objectives 63
Introduction 63
CRM implementation 63
Phase 1: Develop the CRM strategy 65
Phase 2: Build CRM project foundations 72
Phase 3: Needs speci cation and partner selection 80Phase 4: Project implementation 89
Phase 5: Evaluate performance 90
Summary 91
References 91
4 Developing, managing and using customer-related databases 93
Chapter objectives 95
Introduction 95
What is a customer-related database? 95
Developing a customer-related database 96
Select the database technology and hardware platform 102Maintain the database 107
Desirable data attributes 108
Data integration 109
Data warehousing 111
Data marts 112
Data access and interrogation 113
Data mining 114
Privacy issues 117
Summary 120
References 120
5 Customer portfolio management 123
Chapter objectives 125
What is a portfolio? 125
Who is the customer? 126
Basic disciplines for CPM 127
Market segmentation 127
Sales forecasting 136
Activity-based costing 138
Lifetime value estimation 141
Data mining 143
CPM in the business-to-business context 147
Additional customer portfolio management tools 154Strategically signi cant customers 157
The seven core customer management strategies 158Summary 160
References 160
6 Customer relationship management and customer
experience 163Chapter objectives 165
Introduction 165
What is meant by customer experience? 165
Experiential marketing strategies and tactics 174Customer experience and the role of CRM 178
vi Contents Features of CRM software applications that in" uence customer experience 179 Researching the link between customer experience and CRM 182Summary 183
References 183
7 Creating value for customers 185
Chapter objectives 187
Introduction 187
Understanding value 187
Sources of customer value 191
Customization 193
Value from products 197
Value from service 201
Value from processes 210
Value from people 213
Value from physical evidence 214
Value from customer communication 216
Value from channels 218
Summary 219
References 220
8 Managing the customer lifecycle: customer acquisition 225
Chapter objectives 227
Introduction 227
What is a new customer? 228
Customer value estimates 231
Prospecting 233
Key performance indicators of customer acquisition programmes 248Making the right offer 249
Operational CRM tools that help customer acquisition 250Support from CRM analytics 252
Summary 253
References 253
9 Managing the customer lifecycle: customer retention
and development 255Chapter objectives 257
Introduction 257
What is customer retention? 258
Manage customer retention or value retention? 260Economics of customer retention 261
Which customers to retain? 262
Customer Relationship Management
VSF This book is dedicated to my children Emma and Lewis of whom I am enormously proud.Customer
Relationship
Management
Concepts and Technologies
Second edition
Francis Buttle
AMSTERDAM BOSTON HEIDELBERG LONDON NEW YORK OXFORD PARIS SAN DIEGO SAN FRANCISCO SINGAPORE SYDNEY TOKYOButterworth-Heinemann is an imprint of Elsevier
Butterworth-Heinemann is an imprint of Elsevier
Linacre House, Jordan Hill, Oxford OX2 8DP
30 Corporate Drive, Suite 400, Burlington, MA 01803, USA
First edition 2009
Copyright © 2009, Francis Buttle
Published by Elsevier Ltd. All rights reserved.
The right of Francis Buttle to be identi ed as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Permissions may be sought directly from Elseviers Science & Technology Rights Department in Oxford, UK: phone (44) (0) 1865 843830; fax: (44) (0) 1865853333; email: permissions@elsevier.com. Alternatively you can submit your
request online by visiting the Elsevier web site at http://elsevier.com/locate/ permissions, and selecting Obtaining permission to use Elsevier material.Notice
No responsibility is assumed by the publisher for any injury and/or damage t o persons or property as a matter of products liability, negligence or otherwise, or from any use or operation of any methods, products, instructions or ideas contained in the material herein. Because of rapid advances in the medical sciences, in particular, independent veri cation of diagnoses and drug dosages should be made.British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of CongressISBN: 978-1-85617-522-7
For information on all Butterworth-Heinemann publications visit our web site at www.elsevierdirect.comTypeset by Charon Tec Ltd., A Macmillan Company.
(www.macmillansolutions.com).Printed and bound in Hungary
09 10 11 12 13 10 9 8 7 6 5 4 3 2 1
Contents
Foreword xi
Preface xiii
Acknowledgements xvii
About the author xxi
1 Introduction to customer relationship management 1
Chapter objectives 3
Introduction 3
Strategic CRM 4
Operational CRM 6
Analytical CRM 9
Collaborative CRM 11
Misunderstandings about CRM 12
D e fi ning CRM 14
CRM constituencies 16
Commercial contexts of CRM 17
The not-for-profi t context 18
Models of CRM 18
Summary 22
References 22
2 Understanding relationships 25
Chapter objectives 27
What is a relationship? 27
Relationship quality 30
Why companies want relationships with customers 31 Why companies do NOT want relationships with customers 40 Why customers want relationships with suppliers 41 Why customers do NOT want relationships with suppliers 42 Customer satisfaction, loyalty and business performance 43Researching the satisfaction-profi t chain 46
Relationship management theories 50
Summary 55
References 55
3 Planning and implementing customer relationship
management projects 61Chapter objectives 63
Introduction 63
CRM implementation 63
Phase 1: Develop the CRM strategy 65
Phase 2: Build CRM project foundations 72
Phase 3: Needs speci cation and partner selection 80Phase 4: Project implementation 89
Phase 5: Evaluate performance 90
Summary 91
References 91
4 Developing, managing and using customer-related databases 93
Chapter objectives 95
Introduction 95
What is a customer-related database? 95
Developing a customer-related database 96
Select the database technology and hardware platform 102Maintain the database 107
Desirable data attributes 108
Data integration 109
Data warehousing 111
Data marts 112
Data access and interrogation 113
Data mining 114
Privacy issues 117
Summary 120
References 120
5 Customer portfolio management 123
Chapter objectives 125
What is a portfolio? 125
Who is the customer? 126
Basic disciplines for CPM 127
Market segmentation 127
Sales forecasting 136
Activity-based costing 138
Lifetime value estimation 141
Data mining 143
CPM in the business-to-business context 147
Additional customer portfolio management tools 154Strategically signi cant customers 157
The seven core customer management strategies 158Summary 160
References 160
6 Customer relationship management and customer
experience 163Chapter objectives 165
Introduction 165
What is meant by customer experience? 165
Experiential marketing strategies and tactics 174Customer experience and the role of CRM 178
vi Contents Features of CRM software applications that in" uence customer experience 179 Researching the link between customer experience and CRM 182Summary 183
References 183
7 Creating value for customers 185
Chapter objectives 187
Introduction 187
Understanding value 187
Sources of customer value 191
Customization 193
Value from products 197
Value from service 201
Value from processes 210
Value from people 213
Value from physical evidence 214
Value from customer communication 216
Value from channels 218
Summary 219
References 220
8 Managing the customer lifecycle: customer acquisition 225
Chapter objectives 227
Introduction 227
What is a new customer? 228
Customer value estimates 231
Prospecting 233
Key performance indicators of customer acquisition programmes 248Making the right offer 249
Operational CRM tools that help customer acquisition 250Support from CRM analytics 252
Summary 253
References 253
9 Managing the customer lifecycle: customer retention
and development 255Chapter objectives 257
Introduction 257
What is customer retention? 258
Manage customer retention or value retention? 260Economics of customer retention 261
Which customers to retain? 262
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