crm

1. Building
Customer
Relationship
DR. BINOD SINHA

2. Contents
Relationship Marketing
Bucket Theory of Relationship
Customer Profitability Segments
Relationship Development Strategies
Relationship Challenges

3. RELATIONSHIP MARKETING
Philosophy of doing business , a
strategic orientation, that focuses
on keeping and improving
relationship with current
customers rather than on
acquiring new customers.
BUCKET THEORY OF MARKETING
Marketing can be thought of as big
bucket
It is what the sales, advertising
and promotional programme that
pours customers into top of the
bucket.
As long as these programme are
effective the bucket stay full.

8. BUCKET THEORY
One Problem – there are hole in
the bucket
When the business running well
and company is delivering
promises ,any holes are small and
few customers leaving.
BUCKET THEORY
When operation are weak,
customers are not satisfied with
what they are getting , customers
start falling out of the bucket
through holes faster than they can
be poured in through the top.

9. EVOLUTION OF CUSTOMER
RELATIONSHIP
Customers as Strangers
Customers as Acquaintances
Customers as Friends
Customers as Partners
GOAL OF RELATIONSHIP
MARKETING
Primary goal is to build and maintain
a base of committed customers who
are profitable to the organisation.
Goal ladder
Acquiring
Satisfying
Retaining
Enhancing

10. Relationship Value of the
customers
Is a concept or calculation that
looks at customers from points of
view of their life time revenue and
profitability contribution to a
company.
Or Financial implication of losing a
customers.

11. Customers Profitability
segments
PLATINUM TIER
Company most profitable
customers those who are heavy
users of the products, not so price
sensitive
Willing to try new offerings
Committed customers of the firm.
GOLD TIERS
Profitability level is not as high
Seeking Discounts
May be heavy users but not
committed to one firm

12. IRON TIER
Who provides volume needed to
utilize firm capacity
But their spending level, loyalty
and profitability are not
substantial for special treatment
LEAD CUSTOMERS
Who are costing the company
money

13. Relationship
Development
model
RELATIONSHIP DEVELOPMENT STRATEGIES

14. A FIRM NEED TO BEGIN THE CUSTOMER RELATIONSHIP BY
PROVIDING A GOOD CORE SERVICE DELIVERY THAT AT A
MINIMUM MEETS CUSTOMER EXPECTATIONS AND PERCEIVED
VALUE.
CORE SERVICE PROVISION

15. Satisfaction,
PERCEIVED SERVICE
QUALITY
PERCEIVED VALUE
CORE SERVICE PROVISION

16. Switching barriers
RELATIONSHIP DRIVERS

18. Switching Barriers
Customers inertia ----Certain amount of efforts require to change firms.-
----Customers think it is not worth to switch providers.---Breaking the
relationship require the restructure the life ……..(Automobile Repairs )
Switching Costs-------Customers develop loyalty to the organisation
because of cost involved in and changing to other firms.-----Switching
costs involve setup cost, leaning cost, contractual cost that make it
challenging for the customers to move in other providers.

19. Relationship Bond
Financial Bond
Social Bond ( Learning,education, health care, beauty parlor)
Caterpillars example
Customization bond----enhance customer intimacy -----
Structural Bond ---Cardinal health

20. Outcome
Customer benefits………..Confidence benefits, social benefits and special
treatments benefits
Firm benefits-------economic benefits, customer behaviour benefits,
Human Resource Management benefits

21. Relationship Challenges
Next session
--------Is Customer always right ???
………..Can organisation fire customers ??????
……….