Levels of Relationship Strategies for Bonding Customer Relationship

Leonard Berry and A. Parasuraman2 developed a framework for understanding bonding for cus­tomer relationship management (CRM). The framework suggests that relationship marketing can occur at different levels. Each successive level of strategy results in sustained competitive advantage and bonds the customer closer to the firm. The four levels of relationship strategies for bonding customer

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Customer Defections

A customer defection occurs whenever a customer switches to a competitor. Customer defec­tion is the rate at which customers stop the usage of products of a company. Businesses with high defection rates would be losing their existing customers. Customer defections can tell a firm a lot about its products and services from an external

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Customer Retention Programmes

How can organizations retain customers? The marketing programme should be derived from and support the company’s mission and business plans. The following step-by-step approach gives a methodology to develop a comprehensive customer retention programme. 1. Step 1: Review the Mission Statement The first step is to review the company’s mission statement. Mission statements should

Economics of Customer Relationship Management

If buying customers is the biggest expense, then continually buying new customers (buying market share) is the most expensive way to do business. Market share or a focus on new customers comes with an assumption that you are in the business of buying products or services and selling them to customers. If, however, you

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Creating Relationship Value (Lifetime Value of Customers)

Customer lifetime value (CLV), lifetime customer value (LCV) or lifetime value (LTV) and the new concept of “customer lifecycle management” is the present value of the future cash flows attributed to the customer relationship. The use of customer lifetime value as a mar­keting metric tends to place greater emphasis on customer service and long-term

Customer Acquisition and Segmentation

All customers are not equal and; therefore, not all of them should be treated equal. Two strong keywords in the discussion of CRM concepts relate to “selectivity” and “partnership.” There exist various customer hierarchies that evaluate the involvement of the customer with the company. Some of these are Prospect-Customer-Client, Supporter-Advocate-Partner or the more simplified

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Framework for Building CRM Strategy

In competitive markets, even satisfied customers switch or defect to competitive offers. Since loyal customers are more profitable for any organization, there is a need to identify better predictors of loyalty. Indicators of relationship strength such as trust, satisfaction and commitment are better predictors of loyalty and by including these parameters in customer satisfaction

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Ten Tips to Build Customer Loyalty

The key to a successful business is a steady customer base. After all, successful businesses typically see 80 per cent of their business come from 20 per cent of their customers. Too many businesses neglect this loyal customer base in pursuit of new customers. However, since the cost to attract new customers is significantly

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Models of CRM

We will discuss the following models of CRM in this section: The IDIC Model The Value Discipline Model The Gartner Competency Model The QCi Model Payne’s Five-Process Model The Francis Buttle Model 1. The Identify, Differentiate, Interact, Customize (IDIC) Model The IDIC model was developed by Peppers and Rogers. The model suggests that companies

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CRM in B2B and B2C Context

Companies that do not have repeat business from customers will not gain much from CRM. Then who benefits? The more the channels to access customers and more the number of touch points with customers, greater is the need for CRM installation. Compa­nies benefiting from implementing CRM lie in the domains of banking, finance, insurance,

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CRM Scorecards

Kaplan and Norton suggested that companies create CRM scorecards to reflect: (1) cus­tomer oucomes, (2) internal business processes, (3) financial objectives and (4) learning and growth. This is almost identical to four categories of measures of CRM effectiveness: (1) CRM customer cycle, (2) company, (3) e measures (effectiveness, efficiency and employee satisfaction), (3) customer

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Role of IT in CRM

CRM is more than just software. Information Technology (IT) in CRM has three key elements—customer touch points, applications and data stores. Customer touch points are vital if the business has a marketing orientation and focuses upon the customer and his or her current and future needs. This is the interface between the organization and

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Different Levels of e-CRM

Three different levels can be distinguished in defining the scope of e-CRM: Foundational services: This includes the minimum necessary services such as Web site effectiveness and responsiveness as well as order fulfillment. Customer-centered services: These services include order tracking, product configuration and customization as well as security/trust. Value-added services: These are extra services such

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CRM Future

CRM is here to stay and will evolve. The desire to improve customer satisfaction and retention of customers will constantly drive the need to improve CRM systems. The economy is now driven by customers and not by sellers as in the past. There are different type of customers, different types ofbusiness models and selling

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Quality Services at Housing Development Finance Corporation Limited

TQM evolved out of applications in manufacturing companies such as Toyota, IBM, and Motorola. In the 1990s, service companies began to realize that they could benefit from quality management. This is important as the service sector is the largest segment of the US economy, employing almost three times as many people as manufacturing industries.

Introduction

The service sector is an important sector in the world economy today. For instance, more than 60 million people work in the service industry in the USA. The more complex the interna­tional economy, the more the services needed to address problems in sectors such as law, health accounting and education, which are some professional

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Service Industry and Quality

Service can be defined as “any primary or complementary activity that does not directly produce a physical product, i.e. the non-goods part of the transaction between the buyer (customer) and seller (provider).” Quality has traditionally been related to the manufacturing industry. Due to the improvements in technology and automation over the last century, more

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Value in the Service Industry

Like their manufacturing counterparts, most successful service organizations have adopted a new model since the 1980s. They shifted the emphasis from financially optimizing assets to customer satisfaction. The emphasis has shifted from emulating old-design manufacturing to making the core technology flexible, highlighting the key role of the front-line employee to satisfy customers. Service standards

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Classification of Services

Schmenner3 categorized services into four categories in the service process matrix as shown in Figure 16.1. The four categories are named service factory, service shop, mass service and professional service. This matrix considers one variable, which is the degree of interaction and customization. The services categorized in service shop and professional services fall within

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Defining Service Quality

Quality is much easier to define when manufacturing tangible products. Manufacturing quality may simply involve conformance to specifications. A manufacturer can evaluate the level of a product’s quality based on what was produced relative to the design specifications. A defect occurs when a product fails to meet set specifications. The specifications come from product