CHAPTER 2 UNDERSTANDING contact.

(webinars, e-mail,
RELATIONSHIPS advertising, events, wwebsites)
• Moment of Truth (MOT) – any
• A relationship is composed of a series of
occasion the customer interacts
interactive episodes between dyadic parties
with, or is exposed to, any
over time.
organizational output.
• Interaction consists of action and response
to that action. • Engagement – the customer’s
emotional and rational response to a
Change within Relationships customer experience.
• Awareness How to understand customer experience?
• Exploration (Methods)
• Expansion
• Mystery Shopping – recruitment of paid
• Commitment
shoppers to report on their customer
• Dissolution
experience.
2 Attributes of highly developed relationships • Experience Mapping – strives to
understand, chart and improve what
• Trust happens at customer touchpoints. (focus
• Commitment group, face-to-face interviews, telephone
Relationship Quality interviews)
• Process Mapping – a form of blueprinting,
• Relationship Satisfaction for improving back-office internal customer.
• Mutual Goals • Customer Activity Cycle (CAC) – to depict
• Cooperative Norms the processes that customers go through in
making and reviewing buying decisions.
• Ethnographic Methods – to gain a better
CHAPTER 3 CRM AND CUSTOMER
understanding of the socio-cultural context
EXPERIENCE
of customer experience.
• Customer Experience is the cognitive and • Participant Observation – participating in
affective outcome of the customer’s the customer experience at various
exposure to, or a company’s people. touchpoints.
• Non-participant Observation – to observe
From Service to Experience interactions at customer touchpoints.
• Intangible-dominant – cannot be seen, Experiential Marketing Strategies and Tactics
tasted or sensed before consumption.
• Inseparable – services are produced at the • Communications (ads, brochures,
same time. newsletters)
• Heterogenous – many services are • Visual Identity (brand names, logos and
produced by people. livery)
• Perishable – services cannot be held in • Product Presence (product design,
inventory for sale. packaging, display)
• Co-branding (event marketing,
2 Perspectives of Customer Experience sponsorship, alliances, partnership)
• Positive Customer Experience – a Types of CRM
value free and objective statement.
• Normative Customer Experience – a • Operational CRM – the application of
value-based judgment. technology
• Analytical CRM – intelligent mining of
Customer Experience Concepts customer-related data.
• Touchpoint – found wherever your
customer comes into virtual or actual
 CHAPTER 4 CUSTOMER PORTFOLIO CHAPTER 5 CREATING VALUE FOR
MANAGEMENT CUSTOMERS

• Customer Portfolio – the collection of • CRM is the core business strategy that
mutually exclusive customer groups that integrates internal processes and functions
comprise a business’s entire customer and external networks.
base. • Value balance between benefits received
• Customer Portfolio Management (CPM) from a product of service and the sacrifices
aims to optimize business performance made to experience those benefits.
(sales growth, enhanced customer
profitability) Value = Benefits
Sacrifices
Basic Disciplines for CPM Types of Sacrifices:

• Market Segmentation – process of • Money

dividing up a market to create different • Search Costs (Transaction Costs)
value propositions. (a.) Databased • Psychic Costs
segmentation process: Intuitive and • Perceived Risk (Performance risk, Physical
Data-based; b.) Consumer Markets: Risk, Financial Risk, Social Risk and
User Attributes and Usage Attributes) Psychological Risk)
• Sales Forecasting – process of making
predictions of the future customer Sources of Customer Value
activities based on past and present • Value Proposition – the explicit or
data and analysis of trends. implicit promise made by a company.
(Techniques: Qualitative Methods, • Operational Excellence – do a limited
Time-series Methods and Casual number of things very efficiently, at very
Methods) low cost.
• Activity-Based Costing (ABC) – B2C, • Product Leadership – to provide the
C2C. (Categories of Cost: Customer best products, services, or solutions to
Acquisition Costs, Terms of Trade, customers.
Customer Service Costs and Working
• Customer Intimacy – able to adapt
Capital Costs)
their offers to meet the needs of
• Lifetime Value Estimation – measured individual customers.
by computing the present-day value of
all net margins. Value through the Marketing Mix
• Data Mining – the creation of
• Eugene McCarthy – 4P’s: Product, Price,
intelligence from large quantities of data.
Promotion and Place.
(Data mining tools: Clustering,
Decision Trees and Neutral Networks) • Service Marketers’ – additional 3P’s:
Process, Participants and Physical
Evidence
Additional CPM Tools
Customization the loss of economies of scale,
• SWOT Analysis companies have to be aware of, and responsive
• PESTE Analysis to, customers’ differing requirements.
• 5 Forces Analysis (Porter’s 5 Forces)
• BCG Matrix Analysis • Craft Customization – customized offers,
but not a mass market level.
• Mass Customization – use of flexible
processes and organizational structures.
 Value from Products Value from Physical Evidence

• Product-Based Value – created for - Tangible facilities, equipment and

customers through product materials.
innovation.
• Product Innovation – modifications
of existing products, cost reductions Value from Customer Communication
or line extensions.
• Product Modification - changing - Multilateral Communication:
the product in some way. Company-to-customer, customer-to-
company, customer-to-customer.
• Product Association – linking the
brand to some issue or context. 3 Processes to enhance the Power of
• Product-Service Bundling - Communication
practice of offering customers a
package of goods and services at a • Disintermediation – direct-to-
single price. customer (DTC) communication (e-
• Branding - any name, design, style, mail, direct mail and SMS
word or symbol. messaging cellphones.
• Product Synergies • Personalization – based on
customer preferences.
• Interactivity – e-mail, instant
messaging and World Wide Web
Value from Service
(www)
• Service Quality
a. Quality 1 – conformance
to specification. Value from Channels
b. Quality 2 – fitness for - to provide time and place utilities to
purpose. customers.
• SERVQUAL – it offers managers a
systematic approach to measuring 4 Options from Electronic Channels
and managing service quality. • No Internet Sales
• Service Legal Agreements (SLAS) • Internet sales by reseller only
– a service legal agreement is a • Internet sales by producer only
contractual commitment between a • Internet sales by all
service provider and a customer.
(Availability, Usage, Reliability,
Responsiveness, and User
Satisfaction)

Value from Processes

- Order-to-cash cycle, selling process,
campaign management process,
database development process and
innovation process.

Value from People

- Counselling, consulting and
coaching where people are the
product.