Lecture 9

Focus on winning customers

• focus on single sale, not customer service

• emphasis on product features, not benefits

• short time scale

• limited customer loyalty

• quality concern of manufacturing

• moderate customer contact

Based on Gronroos, 1990

-> underpin what we are doing within the relationship, it is important

focus on customer keeping

• want to get multiple sales, long-time scale

• emphasis on product benefits

• high customer service and contact to ensure loyalty

• Quality is concern of all

By Gronroos, 1990

-> points of truth (touch points: understand role to get relationship, who has contact with who)

loyalty drives profitability because customers become more profitable over time due to increased purchases, better operating efficiency, profit from referrals (WOM), profit from premium prices, good will

Reichheld 1996

In relationship marketing customers move up the ladder and become more important to the company, the higher up they are.

Fromlowest to highest: Prospect, Customer (cant rely, bought 1/2), Client (by every now and then andf also from competitors), Supporter (demonstrate loyalty, like products, engage with business), Advocate (recommended to other people), Partner (B2B, longterm, very close, easy forecast).

Along the ladder, the marketing dept. needs to focus on the appropriate actions for the respective situation (establish and maintain relationships)

By Payne et al. 1995

Customer relationship marketing: a strategic approach to create improved shareholder value through developing appropriate relationships with key customers and customer segments

by Payne and Frow, 2005

stages: attract, retain, maintain and terminate

IT enhanced value process, at a profit to identify existing and potential customers

by Plakoyiannaki and Tzokas, 2001

Automate and enhance many CRM processes like: intelligent evaluation of customer data base, automated interaction with customers, optimize algorithm, AI chatbots

By Hopkinson and Singhal, 2018

CRM has seen significant developments in recent decades, including the increasing adoption of automated forms of interactivity between the brand and its customers (Ostrom et al. 2015; Bitner et al. 2000).

Hopkinson and Singhal (2018) use the ‘Stages based’ approach to relationship management to explore the potential applications for AI

• customers voice important!!

• moving towards market

• groups of customers to offer nique products which can be offered on right platforms

By Singhal et al. 2023

1. Attract / Acquire

ask often how C want to be contacted

Chatbots good, can answer man questions, but not WHY

Chat bots and virtual assistants will inevitably play increasing role in managing customer relationships as organizations seek to achieve scale in cost effective manner, especially in mass consumer markets. The limitations of these technologies, however, need to be recognized

• identify where to cut unprofitable or ineffient relationships

• certain customers are more profitable

how can we learn how humans interact and use these to manange relationships

Amercian Marketing Association et al. (2009)

can be used for all stakeholders

downside: expensive

The future of customer relationship management is claimed to be “conversational” (Forbes, 2021), whereby virtual service robots are connected to CRM systems identify customers and provide personalized services at scale.

Significant surge in human-robot collaboration especially in the fields of relationship and services management

Service robots are ‘system-based machines that interact with, communicate with, and deliver services to customers’. These can be either be virtual (e.g. chatbots, speech and text bots) or physical (e.g. service robots)

Chatbots are the most popular form of AI powered application transforming customer interactions

Chatbots are “interactive, virtual agents that engage in interactions with humans”

Attract:

Intelligent content marketing – e.g. serving relevant content and recommendations from customers own network and/or vlogger/bloggers they follow and tailoring content to the stage the customer has reached in along the path to purchase

Personalised advertising to serve customized advertisements tailored to customer behaviour patterns

Retain:

Automated email –to deliver relevant messages and content to selected customers

Personalised advertising to deliver ads tailored to the customers’ actual/predicted anxieties to reduce post-purchase dissonance and remind the customer of the benefits inherent ion the brand/product/service.

Develop:

Automated servicing to deal with post sale enquiries/needs in real time that is tailored to customers’ needs, previous interaction patterns and likely ‘pain points’.

Intelligent servicing of client’s routine needs: e.g. car service appointments automatically booked when service intervals or mileage thresholds are reached

Terminate:

Automated/intelligent servicing – helping clients deal with the formalities of ending a relationship: closing accounts, etc.

Email and personalised advertising to clients to remind reengage with clients that have defected or left or reminds those in danger of defecting of the product/service benefits.