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Premium member Presentation Transcript Slide 1: Customer Relationship Management (CRM) Learning Objectives Define CRM; Understand the importance of CRM; Explain the determinants of CRM and the key stages in its development; Discuss the main functions and various models of CRM; Explain the role of salespeople as relationship developers Discuss the management of customer relationships. Slide 2: What is Customer Relationship Management (CRM)? CRM is “the development and maintenance of mutually beneficial long-term relationships with strategically significant customers” (Buttle, 2000) Slide 3: Understanding Customer Relationship Management (CRM)? CRM is a business philosophy based on upon individual customers and customised products and services supported by open lines of communication and feedback from the participating firms that mutually benefit both buying and selling organisations. Slide 4: Determinants of CRM Trust The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the other company as agreed upon implicitly and explicitly. Value The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms. Slide 5: Determinants of CRM In addition to trust and value, salespeople must: Understand customer needs and problems; Meet their commitments; Provide superior after sales support; Have a passionate interest in establishing and retaining a long- term relationship (e.g., have long-term perspective). Slide 6: Stages in the development of a Customer Relationship The Pre-relationship Stage The event that triggers a buyer to seek a new business partner. The Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The Development Stage Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The Long-term Stage Characterised by the companies’ mutual importance to each other. The Final Stage The interaction between the companies becomes institutionalized. Slide 7: Stages in the Development of a Key-Account Relationship Degree of involvement High Low Nature of customer relationship Transactional Collaborative Pre-KAM Early-KAM Mid-KAM Partnership Slide 8: Functions of Customer Relationship Management Direct functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout: and Access. Slide 9: The role of salespeople as relationship builders and promoters Salespeople by: identifying potential customers and their needs; approaching key decision makers in the buying firm; negotiating and advancing dialogue and mutual trust; coordinating the cooperation between the customers and their company; are the individuals in any organisation who act both as relationship builders and as relationship promoters. Slide 10: Models of Customer Relationship Management The Evans and Luskin (1994) model for effective Relationship Marketing Relationship marketing inputs Understanding customer expectations Building service partnerships Empowering employees Total quality management Relationship marketing outcomes Customer Satisfaction Customer loyalty Quality products Increased profitability Assessment state Customer feedback Integration (Evans and Luskin, 1994) Slide 11: Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customer’s needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment. Slide 12: Relationship networks The ultimate outcome of a successful CRM strategy is the creation of a unique company asset known as a relationship network. A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships. The additional aspects of a global salesperson’s job are to: Manage customer value; Act as customer advocate; and Enhance customer loyalty and build a “health” and profitable network of relationships. Slide 13: Summary CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value to customers in an effort to turn prospects into customers, customers into loyal customers, and loyal customers into partners. 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