If they demand JIT, customised delivery, or are in other ways costly to serve, their value may be significantly reduced. We know of one company that applied activity-based costing disciplines in order to trace process costs to its customer base […] as consequence the company re-engineered its manufacturing and logistics processes, and salespeople negotiated price increases.
John Stevenson , asserts that the CVC includes four stages: The result the companies should seek is their target customer base. They should rate and segment their clients into groups that are most desirable to do business with they meet their criteria for what a desirable customer is. This is called, according to Stevenson the Customer Portfolio Analysis. Having found the segments the firms want to pursue, they need to get to know the ones in that segment very well and better than their competition knows them.
Briefly, they want to appear that they know them intimately by, for example, in knowing their birthday, the number of children they have and their respective birthday. Thus having understood as much as they can about the customers they have chosen to serve, companies are then in a position to create a specific and tailored value proposition for them.
Buttle previously raised five steps to profitable relationships that are, customer portfolio analysis CPA , customer intimacy, network development, value proposition development and managing the relationship. Very briefly, the CPA analyses, according to Buttle , the customer base to identify customers to target with different value propositions.
The customer intimacy involves the business in getting how to know the selected customers as segments or individuals and building a customer data-base which is accessible to all those whose decisions or activities impact upon customer attitude and behaviour. Buttle involves the network development as the third step wherein a strong network of relationships is to be built with employees, suppliers, partners and investors who understand the requirements of the chosen customers. The final step is to manage the customer relationship.
However, the above activities or stages need to be managed. Companies need to manage each customer through their lifecycle. To enable the management of the customer lifecycle and the stages within of portfolio analysis, intimacy, and value proposition development, automated data systems are necessary. The Strategy Development process is concerned with integrating the business strategy from the organization angle and the customer strategy as to how firm interact and choose their customers.
The Value Creation process with the main purpose of identifying the value the firm can create for the customer and the value the organization can also benefit from. The Multichannel integration consists of all the virtual and physical channels with which the firm plans to interact with.
But the main thing here is that, regardless of the channel contact, the aim is to create an experience that is uniform and also common. The Information Management process consists of many different of data repository IT systems, back and front office applications and analytical tools. It is thus necessary to access the visibility of the system so the need for performance assessment process set in and it is concerned at the strategic mon itoring can be used to determine customer satisfaction and standards,.
Taking advantage of the benefits related to a customer relationship model requires data collection and analysis. Data can come from a number of sources.
Customer relationship models can collect data from an analytical or behavioral standpoint. Analytical models utilize data collected from customers, such as location, amount of purchase and email addresses. Behavioral data collection stems from focus groups and surveys and has more to do with what drives consumer behavior. Small businesses can put information gleaned from customer relationship models to work.
They can use the data to operate a loyalty rewards program, customize sales and promotions to specific customer groups and develop ongoing relationships with customers. Another benefit includes the ability to cross-sell. Cross-selling involves suggesting a complimentary item, such as a cushion for a patio chair, at the point-of-sale. This increases profits, brand exposure and helps develop a personal relationship with the customer.
Customer relationship models seek to acquire, develop and retain customers.
The model’s authors prefer to describe their model as a customer management model, omitting the word ‘relationship’. At the heart of the model, they depict a series of activities that companies need to perform in order to acquire and retain customers.
A customer relationship model, also commonly referred to as customer relationship management, seeks to improve the relationship between a business and the customer. When companies, including small businesses, can better identify the needs and desires of their consumers they can increase loyalty and grow the customer base.
The Customer Relationship Management CRM Value Chain Model The CRM value chain (figure. ) is a model which businesses can follow when developing their CRM strategies (Buttle, ). This model had been developed by a range of SMEs such as IT, software, telecoms, financial services, retail, media, manufacturing, and construction. As more retailers evolve into customer-centric and segment-based business, business intelligence (BI) and customer relationship management (CRM) systems are playing a key role in achieving and maintaining competitive advantage.
Analytical customer relationship management (CRM) is the process of collecting and an- alyzing a ﬁrm’s information regarding customer interactions in order to enhance the cus- tomers’ values to the ﬁrm. Top Customer Relationship Management Models Posted by Michael Taylor on November 20, November 20, Posted in CRM When I started writing this, I wanted to discuss all kinds of unique customer relationship management model, as well as look at how this term probably means a good bit more than you may think it does.