Chapter 5 Summary

Understand the essential elements that comprise a customer relationship management program.

Customer relationship management (CRM) is the management of customer relationships based on the integration of customer information throughout the business enterprise in order to achieve maximum customer satisfaction and retention. To accomplish such a task, CRM operated on a simple, yet often misunderstood concept-customer interaction. Customer interaction (in a CRM context) is based o n the relationship between the enterprise and the customer.

Describe the relationship that exists between marketing research and customer relationship management.

One of the primary roles of marketing research in the CRM process is to collect, store, and analyze customer interaction information (customer knowledge). In doing so, marketing research takes on a new role that is unique to the CRM environment. This role is to transform the practice of marketing research into one of market intelligence.

Understand the meaning of market intelligence.

The market intelligence enterprise follows a different business model from the more traditional companies. This model promotes a competitive advantage by using customer information at the "granular" level, that is, data that are highly detailed, highly personalized, and specifically structured around the individual customer. This enterprise embraces the vision that targeting customers is not sufficient; capturing customers is the goal.

Describe how customer knowledge/information is used in a customer relationship management environment.

Two key questions that drive a CRM program are "What does my customer value?" and "What is the value of my customer?" An enterprise driven by market intelligence addresses these questions through its unending effort to strategically use customer information to sort customers into profitable and unprofitable segments. Information from various sources both within and outside the enterprise must be organized and categorized into the firm's data warehouse.

Understand the role of technology in a customer relationship management program.
Technology support makes it possible to develop a strategic, information-rich CRM infrastructure. Technology provides the platform for turning customer data into customer knowledge. In short, information technology plays a pivotal role enabling companies to maximize profitability through more precise targeting of market segments.

Illustrate the process of data collection for a customer relationship management program.
In most CRM programs data are tracked at the point of customer interaction. This may occur at point-of-sale terminals (registers) or on the Web. Regardless of the source, the goal is to collect all relevant customer interaction data, store the data in the data warehouse, and subsequently analyze the data to render profitable customer profiles.

For CRM software, tutorials and applications, please visit the Matrix Technology Group website at: http://www.mxtg.net