CHAPTER 1: STRATEGIC CRM TODAY (T.

3)
1.What is customer value, and why is this term essential for CRM?
Customer Value is the perception of what a product or service is worth to a customer versus the possible
alternatives. Worth means whether the Customer feels she /he or he got benefits and services over what
she/he paid.
Some reasons which explain why customer value is important:
• Potential customers are not specifically looking for your product or service. They are looking for
products that meet their needs and desires. The key is to identify the customer's needs and desires, and
how to help them meet their specific needs.
• Customer value means different things to different people. When products are sold, their intrinsic
properties do not change from one customer to another. However, the customer value or customer
satisfaction provided may change from one situation to another. For one customer, the product might
be an immediate solution to a pressing need, while for others it might not. In this regard, customer
value becomes very important, as the value can be adjusted as needed wherever it may fit.
• Understanding customer needs helps to align customer value. It's good practice to make every client
feel valued; however, some clients may be more valuable than others. These are lifetime customers
and also offer repeat customers and high referrals and referrals. Products that deliver customer value
can support mass sales in specific market segments, which also allows for targeted sales based on
points value.
2.Which technologies influence strategic CRM, on both the consumer and the company sides?
CRM cannot survive without technology. The technology serves as a CRM partner to meet customer
needs. This makes their relationship so meaningful that the company understands what customers want.
They will realize if customers are satisfied enough with their products and services, and if not, they will
easily look for strategies to make them happy.
The database is the soul of CRM. It doesn't work without technology. A database helps to collect and
organize data before it is used for its purpose. It speeds up communication by using the internet to gather
information from customers.
Provide online services to customers. Since nothing is technically impossible, the relationship between a
company and its customers will be strengthened through the use of media technologies such as social
media. Although it's a long way off, it's not hard to bargain.
Services are always available. Thanks to various gadgets, customers now have easy access to companies
that suit their needs. Phones and laptops are just some of the many devices that can be used as long as
there are applications for business use.
Inexpensive CRM. The development of this technology makes it a reasonable cost for CRM. Businesses
can afford it because they don't spend a lot of money just to meet the needs of their customers. As
technology evolves, CRM will continue to evolve to meet the ongoing needs of customers.
The rise of technology has paved the way for the huge positive impact associated with entrepreneurship.
Now, it is easy for companies to give their customers direct access to the products they offer, and CRM is
a customer retention strategy, and it is also attractive to increase the number of customers so that
companies can compete. Integrating technology into a CRM can make it more effective and work as-is.
CRM works better when the power of technology is fully integrated.
3. List some key changes in the business environment. How are these changes driving the shift from
product-based marketing to customer-based marketing?
Changes with respect to customers are:
• Growing consumer diversity- due to demographic and behavioral trends involving ageing of the
population in developed countries, increased diversity in ethnicity of population and increasing
individualization
 • Time scarcity
• Information availability and technological aptitude.
• Decrease in loyalty. Also, there is a diversification of holdings across service providers even within
the same household.
Changes with respect to marketplace are:
• More intense competition between firms for customers. Market access less localized, demands on
logistics management and distribution partnering more significant
• Fragmentation of markets, leading to the need for individualized marketing
• Diminishing product-quality differentiation, creating the need for gaining competitive advantage
through closer, service-focused relationships.
As a consequence, to maintain market share, companies need to realign their business strategy in order to
become customer-centric.
The changes with respect to Data Storage Technology include:
• Better technology, cheaper and larger storage units
• Huge increase in demand for data storage
• Increased popularity of data warehouses
As a result, there is better information about customer behavior and attitudes and better prediction of
customer buying behavior
The changes with respect to the marketing function are:
• Media dilution and multiplication of channels
• Proliferation of communication media focused on the customer, both direct-to-consumer channels as
email, telephone, and interactive media as the internet, interactive TV etc
• Reduced need for techniques focused on price alone due to availability of new data collection and
communication tools and marketing processes such as loyalty programs
• Decreasing market efficiency and effectiveness due to a history of focus on acquisition, price and short-
term transactions and proliferation of new contact channels. Also, there is an increased or flat cost of
contact, decreased customer response and reduced value for advertising in any medium.
These changes have created pressure on the marketing function:
The direct implications of all the above changes to the business environment are in the form of:
• Greater demand for learning about customer preferences, and product and service customization
• Focus on customer-centric instead of product-centric strategies
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CHAPTER 2: CONCEPTS OF CUSTOMER - VALUE

1.How are CRM activities similar/different from marketing activities? Please discuss
CRM refers to the instruments used to implement marketing, which is a sales and marketing concept.
Marketing is done as part of a strategy that includes things like determining long-term sales and retention
goals, public relations, marketing, and advertising campaigns.
Customer relationship management (CRM) refers to the administrative tasks that support a marketing plan.
Gathering client data, organizing it, and analyzing it to generate target customer profiles are examples of
activities. CRM data may also be used to uncover new ways to reward long-term clients for their loyalty
by developing special offers. This helps to strengthen the relationship.

CRM Marketing
Vision: customer experience Vison: market positioning
Use analytical capabilities Customer value Use SWOT analysis Target market segment
segment • Main goals: Manufacturing,
• Main objectives: Development, maintaining, developing, market share,
accuracy, satisfaction, loyalty, brand assets
satisfaction of employees
→Based on the product life cycle
→Based on customer lifecycle

2.What is the distinction between traditional database marketing and a customer value-based
approach toward database marketing?
Database Marketing
• Identify and analyze customer population
• Group based on similarities
• Recommend separate marketing campaigns for different groups
→ Applies database marketing techniques at customer level.
→ Develops strong company-to-customer relationships.
Customer Value
• The economic value of the customer relationship to the firm
→ Analysis and use of marketing databases, as well as communication technologies, to discover corporate
policies and procedures that will optimize each individual customer's lifetime worth to the organization.
→ Customer value adoption as a fundamental strategy aids in defining CRM from a customer value
standpoint.
• Benefits of a customer value-based strategy to database marketing include:
Lower costs
Higher revenues
Higher profits, and higher return on investment (ROI)
Acquisition and retention of profitable customers
Reactivation of dormant customers
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CHAPTER 3: STRATEGIC CRM

1. What are the four key components of CRM strategy? Briefly describe each component.
Customer Management Orientation
• Defined as the set of organizational values, beliefs, and strategic activities that allow customer
management concepts to be implemented.
• Defined by top management's belief and commitment that the consumer is at the heart of all they do.
• Recognizes that consumers' requirements and worth to the company are diverse, and demonstrates a
willingness to handle them differently.
• Takes into account the reality that a longer-term view of client revenues is required.
Integration and Alignment of Organizational Processes
• Comprises organization wide creation and synchronization of processes, systems, and reward systems
enabling implementation of customer management principles
 • Strategic CRM works best for organizations that are organized around cross-functional processes
rather than functional silos
Information Capture and Alignment of Technology
• Consists of all the technology and processes required to collect, store, and process relevant and timely
customer data
• Is distinguished by the capacity to turn data into actionable information • Improves the efficiency and
effectiveness of customer management activities
• Assists in the development of completely new processes and channels based on web and mobile
applications.
• Companies that can generate intelligence and act on it get a competitive advantage.
CRM Strategy Implementation
• Firmly incorporates needs of the customer and goals of the firm into product and service delivery
• Individual processes work in sync with the shared objective of acquiring and maintaining target
customers
• Customer management compatible incentives promote individual and organizational goals at the same
time
• Processes are built in such a way that they automate a feedback loop
2.What is the value proposition?
A multifaceted package of product, service, process, price, communication, and contact that customers
encounter in their business engagements.
Issues to be addressed include:
• What clients value – here is where the corporation should concentrate its efforts.
• What the company claims to provide to its customers
• What the business truly provides to its customers
3. What are the key steps in developing a CRM strategy?
Gain enterprise-wide commitment.
• Top-down management commitment
• Bottom-up buy-in from system users
• Dedicated full-time project team
• Budget allocation for the total solution
Build a CRM project team
Obtain active representation from:
• Management - Provide direction, motivation, and oversight.
• Technical personnel/information services - Make sure the CRM system is compatible with other
software programs.
• Sales, marketing, and service groups - Assess the CRM system's usefulness in terms of effectiveness,
efficiency, and satisfaction.
• Financial personnel - Perform key analysis for increased sales productivity, operating cost
evaluations, predicted system expansion costs, and ROI predictions.
• CRM specialist from outside the company - Provide a valuable source of objective data and comments
Analysis of business requirements
Gathering information to:
• Determine which services and products are supported.
• Draw a diagram of existing workflows, interfaces, and interdependencies.
• Examine the technologies, features, and capabilities that are now available.
• Discuss the company's vision and operational strategy.
• Define the needs of the company.
• Create improved business procedures and workflows
 • Map capabilities to business processes
• Map capabilities to business processes
• Create a new technology and functionality framework
• Create a conceptual design and prototyping strategy
Define the CRM Strategy
• Value Proposition
• Business case
• Customer strategy
• Enterprise transformation plan
• Other stakeholders
4. What are three perspectives of CRM? Briefly describe each perspectives. (T. 34)/T.5
1. Functional level: chi tiết ở Trang 5
2. Customer-facing front-end level
3. Company-wide level:
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CHAPTER 4: IMPLEMENTING THE CRM - STRATEGY

1.What factors will you consider when measuring the ROI of CRM investments?
- Calculate the ROI of CRM to see whether investment meaningfull with the questions
+ How much will consult for the project cost?
+ To what degree is business process re-design necessary?
+ What new software and hardware must be purchased to accommodate the new system?
+ Does the system need to be customized or will it work “out of the box”?
+ How much customization is required and at what cost?
+ Can the system be easily configured and maintained by internal IT staff
+ or is continuous external assistance required?
+ What is the cost of training the company’s staff to use the CRM system?
+ What is the timeframe for implementation and what will happen to the current system processes
during that time?
+ What are recurrent costs?
4 factors to be considered:
 CRM Costs
IT Costs/ People Costs/ Process Costs
 IT Costs
• One-fifth to one-third of the total cost
• Investment in IT infrastructure, database development, and software
• Software components
- Salesforce automation
- Sales management automation
- Call-center automation
- Marketing automation
- Customer-service automation
- Knowledge and operations management
- E-commerce functions
 People & Process Costs
• People costs
- Recruitment, redeployment and training costs
• Process costs
- Market segmentation process, selling process and campaign management process
 Stages of ROI estimation
Setting the Target Content
Determine ROI goal of CRM project based on benchmarking, similar
projects, external and internal knowledge.
Questions to raise
• Is the goal sufficient?
• Is this goal achievable?
Reaching the Target Content
Generate ideas of how to reach the target through internal bottom-up
participation, external views, consultants, benchmarks, etc
Questions to raise
• What factors have to change and by how much?
• Does it work from a technical perspective?
• Are the proposed benefits clear?
• Will customers and/or staff accept these measures?
Building Consensus Content
and Commitment Have executives and line staff agree on proposed ROI goals and ensure
commitment on both sides
Questions to raise
• Are we collectively prepared to sign them off?

2. What are the various components of the CRM architecture from an operational perspective?
3. What analysis is involved in assessing the value of a customer?
Customer demographic analysis and behavior modeling: be able to identify who your customers are by name,
gender, age, address, and phone number, among other things. How consumers have acted in the past and how
they are likely to behave in the future => build customer categories and use them to make differentiated
marketing, sales, and customer service decisions.
Finally, it is critical to focus resources on the most important client connections after creating the methods
and analyzing consumer demographics as described above.

CHAPTER 5: CUSTOMER ANALYTICS PART 1

1.Calculate the acquisition rate of a bank in Italy if you know the target market of the credit card
issuer might have been two million office staffs. Acquisition was measured in terms of new credit
cards issued. The bank issued a total of 120,000 new credit cards.

Acquisition rate = 100* 120,000 / 2,000,000 = 6 %

2.Calculate the Average Inter-purchse Time (AIT) of a supermarket if customer buys, on average,
4 times at this supermarket during a month.

Average Inter-purchase Time of a customer = 1/4 = 0,25 month

→7.5days (lấy kết quả x với ngày trong 1 tháng)
3.Calculate the Remaining Customers after a period of 5 years, if the constant retention rate is
60%, and in year 1 the company X can acquire 500 customers.
Customers remaining at the end for year 2: 0.6 * 500 = 300
Customers remaining at the end for year 3: 0.6 * 300 = 180
Customers remaining at the end for year 4: 0.6 * 180 = 108
Customers remaining at the end for year 5: 0.6 * 108 = 64.8 ( 65 )
The effect for a cohort of customers over time-out of 500 customers who start in year 2, about 65 are left
at the end of year 5
4.Number of customers starting at the beginning of year 1 is 1,000. Computing the number of
survivors.
Retention Rate Survival Rate Survivors
Year 1 0.5 0.5 =(1.0-0.5(churn)=0.5) 500=(0.5*1000)

Year 2 0.6 0.3 = (0.5*0.6) 300

Year 3 0.7 0.21 (0.3*0.7) 210

Year 4 0.8 0.168 168
 Year 5 0.9 0.1512 151.2

5.Compute the P (Active) of each of the two customers in the twelfth month of activity, where
customer A bought five times within the first 8 out of the observed 12 months and customer B
bought only three times within the first 9 out of the last 12 month.
8
For Customer A: 𝑇𝐴 = = 0.667 and n = 5
12
𝑛
P (Active) A = 𝑇𝐴 = 0.6675 = 0.132
9
For Customer B: 𝑇𝐵 = = 0.75 and n = 3
12
𝑛
P (Active) B = 𝑇𝐵 = 0.753 = 0.422
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(?) How would you calculate the retention rate of your company’s customer base? What
assumptions do you need to make?
• Customer retention rate designates the percentage of customers the company has retained over
a given time period. Retention rate is a reverse side of churn rate, which shows the percentage
of customers a company has lost over a specific period. The importance of retention rate as a
metric varies depending on the industry, for example for businesses providing services or
selling software goods, customer retention is crucial and it directly affects profitability of the
business.
• There are several formulas to calculate customer retention rate, one of the most used and easy
one is the following:
Customer Retention Rate = ((EC-NC)/SC)*100, where:
EC - number of customers at the end of a period
NC - number of new customers during that period
SC - number of customers at the start of that period
• Let's say you released a mobile game. On September 1st you had 1000 players. You got 500
new players by September 30, however 200 players stopped playing the game. So, at the end of
a period (in our case one month) you had 1300 playing customers. Let's calculate the retention
rate:
((1300-500)/1000)*100=80
So, you manage to retain 80% of your customers.
(?) How will you calculate the acquisition cost per customer?
Consider a mail – order catalog company, an IT service company, and a retail store. What
are the underlying assumptions in each case? How precise are you calculation?
• Measured in monetary terms

• Precise values for companies targeting prospects through direct mail

• Less precise for broadcasted communication
• Information source
• Numerator: from internal records
• Denominator: from internal records
• Evaluation
- Difficult to monitor on a customer by customer basis
For example:
- You work for an IT service company that sells products to customers for $100 each.
- Each product costs you $50, so you add a 100% markup, enabling you to earn a profit of $50
per item.
- In one month, you spend $3,000 to make the campaign on your site, and this effort earns you
300 new paying customers.
- If your total acquisition cost (remember, this is your campaign spend, plus all the other things
you pay for such as warehouse space, website maintenance, etc.) is $5,000, then your true AC
would be $16.66.
- The formula looks like this: ($3,000 + $2,000) / 300 = $16.66

CHAPTER 6: CUSTOMER ANALYTICS PART 2

1. A hotel chain wants to analyze its customer base with RFM. Describe the data fields (variables) in the
database necessary to do this.
A hotel chain wants to analyze its customer base with RFM. Describe the data fields (variables) in the database
that are necessary to do this. (Natasha)
Recency, frequency, monetary value (RFM) is frequently used to predict purchase behaviour.
The recency is a measure of how long it has been since a customer last placed an order with the company. How
recently they last stayed at the hotel, it could be who stayed this month in the last 6 months or last year. You
would need the customer data base and when the last time they stayed was.
Frequency is a measure of how often a customer orders from the company in a certain defined period. The only
difference in the variables from the first one is average number of purchases made by a customer per month or
year depending.
Monetary value is the amount that a customer spends on average transaction, requiring the purchasing price.
This metric helps to evaluate the long term economic value of a customer and customer equity. This method
independently links customer response data with R, F, and M codes and then group’s customers belonging to
specific RFM codes.
2. Whatever RFM analysis can do, regression analysis can do as well. Evaluate this statement.
In one RFM method, regression techniques are often employed to arrive at the relative weights for R, F, and M.
These weights are the basis for computing RFM scores. Apart from the values of R, F, and M, the only inputs
needed for scoring and sorting the customers to identify the most profitable customers in RFM analysis are the
relative weights for R, F, and M, which are obtained from regression analysis. To that extent regression analysis
has the necessary techniques to identify profitable customers just as an RFM analysis does.
3. How will you use LIFT charts to determine future marketing action?
• Lifts charts illustrate how much better the current model performs compared to the expected results if no
model was employed (base model).
• They can be used to track a model's performance over time or to compare a model's performance on multiple
samples.
• Lift% = (Response rate for each decile) / (Overall response rate) *100
• Cumulative lift% = (Cumulative response rate) / (Overall response rate) *100
• Cumulative response rate = cumulative number of buyers / Number of customers per decile
4. Describe three business situations where you would consider using logistic regression as the preferred
technique for analysis and decision making.
1. A car dealership hosting a sales event to possibly attract customers to purchase a vehicle. The logistic
regression could analyze the dependent variable if the customer that came to the sales event bought a car or not
and the predictor variables could be if the customer has visited the dealership before through previous car
purchases or through previous service done on their vehicles, and through other demographics such as income,
education, and vehicle preferences.
2. A mobile phone company hosting a trade in your old phone event to get customers to switch over to new
phones. The logistic regression could analyze the dependent variable if the customer brings in their old phone
and trades it in or not, and the predictor variables could be identifying which customers are near the end of their
contracts or currently done their contracts. Other information such as how often they switch their phones, and
their current contract plan could be used to see which customers would be willing for an upgrade or change in
plan.
3. Upgrade of a credit card at a local bank. The logic regression could be used to identify potential targets for
marketing credit card offers to existing customers. The dependent variable could be whether or not the customer
signed up for a credit card offer upgrade and the predictor variables could be which other bank services the
customer used plus other financial and demographic information such as income, and purchases used with other
credit cards.
5. What is the link between customer lifetime value and the profitability of an organization?
• Customer lifetime value (or LTV) is the average amount of money spent on your firm by your customers over
the course of your relationship.
• If a customer buys products or services from your company for ten years and spends $10 per year, his or her
customer lifetime value is $100, less any money you paid to acquire that customer.
• LTV is a metric that can be used to determine a customer's worthiness. It is frequently used by medium
to large businesses to forecast future revenue from their consumers. LTV can be widely used in numerous fields
of varied natures, goals and objectives. The finest basis for making market and consumer strategy decisions is
LTV. An organization can drive the business choice on how much to invest in a customer for profit optimization
by predicting their profitability.
6.What is the Past Customer Value?
Past customer value (PVC) is a statistic that considers the results of previous transactions are a predictor of
future contributions from the customer.

7. What is the basic lifetime value (LTV) model?

• LTV is a measure of a single customer’s worth to the firm
• Used for pedagogical and conceptual purposes
• Caution:
- If the time unit is different from a yearly basis, the interest rate needs to be adjusted accordingly
• Information source
 - CM and T from managerial judgment or from actual purchase data.
- The interest rate, a function of a firm’s cost of capital, can be obtained from financial accounting
• Evaluation
- Typically based on part customer behavior and may have limited diagnostic value for future
decisionmaking
8. How to calculate the Customer Equity?

9. How to calculate the Customer Equity Share?

• Customer Equity Share (CES):

• Where: CEj = customer equity of brand j, j = focal brand, K = all brands a firm offer
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CHAPTER 7: DATA MINING (T.137)

1. What is the need for Data Mining?
• Companies developed a need to understand their customers better
• They must be proactive and anticipate customer desires
• Many companies have full access to detailed customer data
• Data mining provides businesses with the ability to make knowledge-driven strategic business decisions
• The increasing data deluge instead of lack of data generates a problem for many companies which leads into
an obstacle (to use data)
• Companies need to implement a standardized data mining procedure in order to extract customer intelligence
and value from that data

2. What is the Business Value of Data Mining?

Data mining can assist in selecting the right target customers or in identifying customer segments with similar
behavior and needs
• Applications of data mining include the following:
• Identifying customers that are likely to stop business with the company with the help of predictive models
• Increasing customer profitability by identifying customers with a high growth potential
• Reducing marketing costs by more selective targeting
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CHAPTER 8: DATABASES (T.157)

1. What are the various ways to categorize databases?
• Types of databases
- Categorization based on information in the databases
- Categorization based on the nature of the underlying marketing activities
• Categorization
- Based on their main business functions
- Databases managing business operations
- Databases supporting decision-making activities
• Alternate categorization:
-Information included in the databases
-Nature of the underlying marketing activities
-Database technology used
2. How are databases classified based on the information they contain? Are these different classes of
databases complement or substitutes?
❖ Customer Database
• Data from active and inactive customers
• Information included in customer databases:
- Basic information: name, address, zip code, and telephone number
- Demographic information: age, gender, marital status, education, number of people in household,
income
- Psychographic information: values, activities, interests, preference
- Transaction history: frequency of purchase, amount of spending
- Other relevant information: inquiries and referrals, satisfaction, loyalty
• Data from Inactive Customers:
- How long have the customers been inactive
- How long have they been active?
- What was their purchasing pattern when they were active?
- How much did they spend?
- How were they initially acquired?
- Why are they inactive?
• Prospect Database
- Non-customers that have profiles that are similar to the profiles of existing customers
- Segments prospects and positions the company’s differentiated products to the prospects’ specific needs
• Cluster Database
- Clusters defined based on geographic reference groups, affinity groups, and lifestyle reference groups
- Depending on the membership of prospective customers to specific clusters, firms can customize their
marketing communications
• Enhancement Database
• Used to transfer additional information on customers and prospects
• An overlaying process is used that eliminates duplications
• Enhancements may include: demographic and psychographic data, transaction history, changes in
address, changes in income levels, privacy status, new product categories bought recently
• These are different classes of databases complement or substitutes because:
• Alternate categorization:
• Information included in the databases
• Nature of the underlying marketing activities
• Database technology used
3.List some of the key uses of marketing databases. Provide an example for each of those
• Categorization Based on The Nature of Underlying Marketing Activities
• Passive marketing database
• A mailing list that passively stores information about acquired customers (email)
 • Future marketing efforts target the same customers in the list (Telesales)
• Active Marketing Database
➢ Example: Travelers’ case
Retention program- five ‘touches’ – systematic and low-cost interactions
Result – increased retention rate; decreased defection by 5
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CHAPTER 9: CRM IMPLEMENTATION

1.Practicing CRM without technology is not possible. Do you agree with this statement?
CRM has been practiced since the first development of a customer. Traders in the fur trade had to have a
certain sense of customer service or relationship skills because otherwise fur would be traded at a different
post. The act of a clerk or waiter remembering your name, a business giving you a deal simply because you
shop there often are still all acts of CRM. These were all acts occurring much prior to current technology. So
is the practice of CRM possible without technology? The answer is yes, though it has made leaps and bounds
in making businesses much more efficient, to place an order and have recurring emails letting you know of
other products in stock. Email follow-ups post purchase or even kind phone calls for follow-ups. These have
all been made possible by technological CRM.
2. What are the various ways to deploy CRM? What are their advantages and disadvantages?
- To adopt a CRM solution, businesses can choose from one of three options: developing software in-house,
purchasing licensed software, or outsourcing software development.
- The benefits and drawbacks of each choice are as follows:
+ Developing software in house:
Advantages: They may reduce their reliance on CRM software vendors as well as new software releases and
innovations.
Disadvantages: Because the corporation must maintain, run, and enhance the system on itsown, this is usually
the most expensive option.
+ Buying licensed software:
Advantages: Many of these software packages have a track record of success, allowing the
organization to rest certain that the solution has worked for others. The CRM vendor will implement the IT
concept and innovations, and the organization will only need to change its IT structure to integrate the new
system.
Disadvantages: This is also an expensive alternative, and integration with the company'soperations may take
many months.
+ Outsourcing creation of software:
Advantages: Compared to the other two options, the upfront costs are smaller. Software
licenses and hardware equipment are not required to be purchased by businesses. To administer the new CRM
solution, the company does not need to hire or develop internal IT capabilities.
Disadvantages: The organization must contact the outsourcing company each time it needs to modify the
solution to new requirements and pay for the changes. Because the implementing firm is completely reliant
on the outsourcing firm, platform selection is considerably more critical.
(?) If you were a CEO of a company serving about 200 customers and want to acquire more than 50
potential customers this year, which option would you choose to implement CRM in your company?
Why?
I will choose the Outsourcing creation of software plan because this is a small-sized company without spending
too much on CRM so this is the best option for the current company. Because the upfront costs are lower than
in the other two approaches. Companies do not need to pay for software licenses and hardware systems. The
firm does not need to recruit or develop internal IT skills to manage the new CRM solution.
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CHAPTER 10: LOYALTY PROGRAM (T.179)

1. Explain the difference between behavioral and attitudinal loyalty. Provide an example of each.
Behavioral loyalty refers to the observed actions that customer have demonstrated toward a particular product
or service. Attitudinal loyalty instead refers to a customer's perception and attitudes toward a particular product
or service.
Example: A person who regularly shopped at the same place is behaviorally loyal, while one tells others how
great the product is, or simply feels really positive about the brand he is from. he or she chose to be loyalty by
attitude.
2. What are the key objectives of loyalty program? Which of these objectives provide the strongest
competitive advantages?
The key objectives of LP:
a) Building true (attitudinal and behavioral) loyalty
b) Efficiency profits
c) Effictiveness profits
d) Value aligment
3. You are a consulant to a credit card organization that wants to establish a loyalty prpogram. The
CEO has just read abotut how most loyalty programs result in money - losing propositions. How do you
alleviate the CEO's concerns?
Because this is a program that consumes time, manpower, money and does not bring immediate profit. But it
takes a certain time to be able to see the effect that the loyalty program brings. If successfully applied, the
loyalty program will help the company increase sales and profits; increase interaction with users; increase
brand awareness; increased NPS; increased RFM; ...It can be seen that, although it costs a lot for loyalty
program, when applying the loyalty program, it will bring a positive effect and a great revenue for the
company. The amount of money the company earns after applying the program will be much higher than the
initial cost if we know how to apply loyalty program appropriately. Therefore, the director should consider
and learn in choosing a suitable program for the company to avoid wasting and increasing profits.
4.Do companies profit by introducing loyalty program? Is the success of a company's loyalty program
dependent on its industry category?
• Many companies can benefit from implementing loyalty programs. According to Forbes, many
companies make almost 20% of their profits from these programs. The mistake many companies make
is their "put it and forget it" attitude - the attitude of accomplishing anything that you actively fear and
deliberately avoid for these programs without keeping up with your change in the market.
• They simply do not realize that a poorly designed and implemented program can actually destroy value
by spending more than the money they create.
• Companies need to focus on the majority of the factors to make a successful loyalty program profitable.
- Focus on what is gained and not just who provides repeat visits. The goal of customer acquisition, which is
really profitable, is not just the number of acquisitions.
-Bringing customers to spending structure, providing more rewards for spending more.
-Smart removal of customers with the lowest profit.
- Get back profitable customers who moved, used past purchase data, etc.
-Increasing the lifetime value of customers (CLV).
 -Building genuine customer relationships based on relevance and relevance
- Establish a more fair pricing policy.
- Smart response to competitive challenges.
- Improve product range and stock options.
- Better business and store layout.
- Reduce advertising and promotion expenses.
- Reduce marketing/advertising costs (email is cheaper than print).
- Loyal customers directly affect the company's profits.
- Develop a core offer that cannot be denied.
- Affect the level of customer satisfaction.
- Affect the elasticity of purchasing decisions.
- Assess the impact of the market on customer loyalty.
- Use demographic data to predict loyalty.
- Increase the proportion of wallets.
- Promote the brand to build customer loyalty.
- Becoming a true business see customers as the business center.
- Ensuring the success of a loyalty program.
- Detailed planning and careful implementation.
- Rapid market entry with an alliance program.
- Successful implementation of the CRM system.
- Use gift cards and store loyalty cards.
- Use six P's in loyalty marketing.
- Building a database can really create loyalty.
- Avoid technology issues with a loyalty base.
5. How can you measure loyalty? How does loyalty relate to the profitability of a company?
• There are 10 measures of customer loyalty efficiency that will work for all businesses and need to be carefully
monitored to establish a loyalty strategy.
• Share wallet:
-Share Wallet measures the percentage of customer spending in the category that you capture.
-It's a clear measure of great significance - understand it and you'll find it easier to build customers effectively.
• Lifetime value of customers:
- Data problems can make it difficult for some businesses to quantify, but CLV is a key measure of customer
loyalty, particularly when its performance is monitored over time.
- It also shows how much you can afford to invest in customer relationships.
- Sales per customer
- Sales trends per customer can help you understand the value of customer segments and eliminate the impact
of changes in absolute customer numbers.
• Active customer volume:
-A seemingly basic but important measure of customer loyalty.
- Knowing the number of active customers (and 'activity' can be defined as trading or interacting with your
content) and how these trends will give you an indication of interaction.
• Access frequency:
- Measure how often your customers visit you and you will have an effective measure of customer loyalty.
- They can also visit your competitors, but the frequency of visits is a powerful measure that will help you
increase customer loyalty.
• Recency:
- Spending per customer or access frequency is increasing but if a recent visit - a customer who recently traded
with you - is declining, you could have a serious problem.
• Spending per transaction:
- This measure indicates the level of purchase that customers are making in your business.
- Spending per Transaction may vary due to price changes but also as a result of customers beginning to split
purchases, potentially also spending at competitors.
• Retention rate:
- Calculated by the number of active customers in the most recent period of activity in the previous period.
Retention rates are one of the best measures of customer loyalty.
• Index of participation:
- The measure takes into account the extent to which your customers are actively engaged with you - factors
such as email clicks, offers, offers and referrals can all be important and engagement metrics are often the sum
of fusion of several factors.
• Net Promoter Score:
- Network advertising is a management tool that can be used to assess the loyalty of customer
relationships of a company. It serves as an alternative to traditional customer satisfaction research and is
claimed to correlate with revenue growth.
• How does loyalty relate to a company's profitability:
Customer loyalty means a lot to the company and the profitability ratio tends to increase with customer loyalty.
Loyal customers will have lower service costs than new customers because the transactions have been carried
out according to the familiar route and they are also less demanding at the company, they propose ideas for
products. and services for the company, speak well about the company and its products, pay less attention to
brands and ads of competitors and are less sensitive to prices, buy more when the company introduces new
products and improve the current product quality. Loyalty is considered to be a major contributor to company
profits, an increase in loyalty will help the company grow more sustainably. Therefore, in order to survive,
develop long term and increase profits, it is necessary to have loyal customers.
6. Would low-item (coffee, candy, sodas) benefit from loyalty programs? What kind of incentives might
work best?
With low ticket items such as coffee, candy and soda, these products are often purchased for consumption
meaning they seek or enjoy these products after consuming them and create a good experience. Having a big
reward for low ticket items makes sense simply because the items are on sale at a low price and it's more likely
that consumers don't have to think before buying the product again if they've sold it before. By introducing a
reward card program, in which consumers will have to purchase six cups of coffee before getting the free
Saturday is an example of providing rewards for repeat purchases and bringing back Value for consumers
because cheap items don't seem to be a big deal. Other reward program structures that provide incentives will
be the holding of a contest in which consumers have 1 in 6 chances to win prizes and the prizes will range
from free coffee to a medium. new traffic.
7. Design a loyalty program for you neighborhood gas station. Describe the incentives. Determine the
cost structure. Set benchmarks and evaluate the profitability of the program across possible seenarios.
Petrolimex petrol station
• Description of loyalty program: For every VND 30,000 for a gas refill, customers will receive 1 point;
100 points is equivalent to 50,000 VND.
•Offer: Loyalty to a gas station will collect enough points to redeem rewards in cash.
•Cost: VND 50,000 off when customers earn enough points.
• Structure: The structure is built so that it looks appealing to consumers without costing the company/
business. Attract loyal consumers and build a competitive advantage over rivals.
• Benchmark: Competitors in Ho Chi Minh City with this gas station: Revotec, Comeco, ...
Assessing profit scenarios: In order to accurately evaluate the effectiveness of the program, it is necessary to
understand the information about the company, the program, the local competitors and th current financial
situation of the industrygas.
(?) Design a loyalty program for a firm you like. Describe the incentives. Determine the cost structure.
Description of the loyalty program: For every $20.00 spent the customer receives 1 point. 100 points equals
$10.00 off.
Incentives: To be loyal to the gas station in anticipation to collect enough points to redeem a cash reward.
Cost: The $10.00 off gas, (I’m not sure what markup is after doing some research it's quite complicated because
of the fluctuating price of gas, refining of it, taxes per zone, marketing, transportation of the gas it appears to
be only a few cents markup.)
Structure: The structure is built so that it appears to be attractive to the consumer without costing the company
much. Enticing the consumer to be loyal and building a competitive advantage over your competitors.
Benchmarks: The local competitors to this gas station, so most likely, Shell, Petro –Canada, Canadian tire.
Evaluate Profitability Scenarios: To be able to evaluate the program I really think you would need to know a
lot about the company and the local competitors and the current financial situation of the gas industry.
(?) Should the gaming industry be allowed to use loyalty instruments? Why?
We cannot say exactly whether or not we should:
In the case of people playing with entertainment and self-control, the use of loyalty tools is essential to retain
and exploit more from customers.
In the worst case, players who want to get rich from gambling should not use the loyalty tool that will make
them bankrupt, not worry about work and worse than suicide.
The proposed solution is to limit the amount of money to play in a day to $ 200- $ 500, so that the number of
customers playing for entertainment increases and that customers play for wealth decreases.
(?) You are CRM consultant to a credit card organization that wants to establish a loyalty program. The
CEO has just asked "How most loyalty programs result in money-losing proposition? How can you
advise him?

A credit card organization actively works to promote customer activity and engagement with “thank you”, a
bank loyalty program designed to reward customers for using the bank’s network and partners. Points are
accrued through using mobile apps, ATMs, checking accounts, and other services and can be redeemed towards
products, travel, and even previously purchased products.

This program not only incentivizes customers to use credit cards of your organization, but it also promotes them
to use other services, while rewarding individuals for actively doing business with the bank.

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CHAPTER 11: CAMPAIGN MANAGEMENT

1. Explain the three key steps in the management of campaigns.
- Campaign Planning & Development
At the campaign planning stage, marketers make strategic decisions that help define the overall
objectives of the campaign, the best communica-tion message, and the best target audience. Once these
strategic issues are defined, the develop-ment phase starts.
- Campaign Execution
The campaign execution stage is the operational process by which a campaign is implemented. There
are two important aspects at this stage: implementation and monitoring
- Analysis & Control
Analysis and control end the campaign manage ment cycle. In this phase, marketers should be able to
draw some conclusions about the cam paign success and use these results not only to improve their
customer knowledge but also to improve future campaigns. This is an important stage because it
evaluates campaign results in light of the original objectives and determines the campaign level of
success or failure. Features that run well should be used as "best practices" for other campaigns. For
features that didn't per form well, marketers should search the reasons why this has happened. This
research should be recorded in the CRM database to serve as a learning lesson to future campaigns.
Campaign analysis can be done in many ways. Marketers can use campaign key performance indicators
(KPI) and compare them with budgeted KPI's and campaign objectives. They can also perform back
end performance analysis to deter mine the purchase behavior of campaign respon dents. Finally, more
elaborated analysis can be performed, such as profile and response analysis, to link profiles and
behavior with the campaign
2. Imagine you are the manager of a chain of 25 seafood restaurants in Virginia. The restaurant has a
mainstream positioning. You are planning a campaign to attract new clients and your available budget
is $30.000. Describe how you would go about implementing this campaign.
• 7 common ways to calculate a Campaign Budget:
• Present Budgeting
• Budgeting for an Allowable Marketing Cost (AMC)
• Budgeting with the Competitive Party Method
• Budgeting with the Objective and Task Method
• Budgeting with the Percentage of Sales Method
• Budgeting with Key Performance Indicators
• Budgeting with the Life Time Value (LTV)
• Budgeting with the Percentage of Sales Method
• Fixed percentage of turnover allocated to marketing communications
• Marketing communication expenditure directly linked to sales level
• To determine the exact percentage that should be allocated, the company looks at
• Competitor allocations and industry averages
• To define the turnover, the company can look at historic sales Budgeting with Key Performance Indicators
• Process that allows company to figure out the cost of a special promotion
• Often called front-end analysis
Spend $ 10,000 on media campaigns like website announcements and inviting speakers
Spend $ 15,000 on promotional vouchers or activities
Spend $ 2,500 on decorating activities
Spend $ 2,500 on sweepstakes game activity
3. Explain the ideas around the concept of campaign testing? Do you think that testing in general will
become more important in the future? Why or why not?
Conducting a comparison between different ways of proceeding with a campaign
Test individual campaign elements, other elements remaining constant, and measure the resultant change in
the performance of the campaign
• Important
– Shows real behavior, as it provides a (close to) real environment in which behavior is validated
– Augments and validates research
– Stimulates creativity
– Protects the company’s greatest asset (the customers): by using only small samples with each test can give
customers the “proven offer”
– Minimizes financial risk and avoids costly errors
– Uncovers ways to reduce costs
• Not important
- Performing several tests with the same set of customers
- Limited time validity: since customer preferences change over time, conclusions -drawn from tests often
short-lived
- Testing the same things all over again
- Optimizing a particular campaign driving the testing rather than having a successful marketing program
4. Give examples for the key performance indicators for the evaluation of a campaign success.
• The corporation is beginning a campaign to attract new customers to a product. The customer acquisition
goal for the campaign is 1000 consumers. The corporation can afford 30 dollars per customer (AMC = 30
dollars), with a profit margin of 50 dollars each sale. This program's campaign budget is $30.000. (30 x1000).
• For testing, the company sent promotional emails to 3000 prospects and sent a letter to 3000 prospects. A
rental list of 500 candidates will be contacted by phone.
After the test campaign, there is a budget of 19,200 dollars left over from the original 30,000 dollars. This will
be used to send emails to the 57,000 email addresses that were not utilized or were not active throughout the
campaign.Total cost for email campaign will be 17,000$ which leaves 2,100$ for the best ROI.
5. Explain the advantages and disadvantages of the various campaign budget setting methods.
1. Budgeting for an allowable marketing cost
• Determining the amount that can be spent on campaign marketing activities while maintaining the required
profit margin is what budgeting for an allowable marketing cost (AMC) entails. Each possible expenditure is
prioritized based on its expected return on investment, and each investment is treated equally. Its goal is to
optimize sales profits by achieving the highest possible revenue per client. The AMC is calculated by
deducting the entire sales value from the costs (cost of goods + distribution costs) and the required profit
margin.
• Advantages: Unless a cash-flow constraint is placed, there is no predetermined limit to the campaign budget
while employing the AMC. The corporation is able to keep costs under control by employing this strategy.
• Disadvantages: Many activities are hard to accurately forecast, and some activities may not pay back in a
given year. These intricacies lead to a degree of conservatism that inhibits the aggressive pursuit of an AMC
marketing policy.
2. Budgeting with the competitive parity method
• The goal of competitive parity is to match budget allocations with those of competitors. This budget strategy
may be used by organizations in competitive circumstances.
• Advantages: This strategy focuses on competitive intelligence. The company is responding to market
conditions by looking at what the competition is doing.
• Disadvantages: It's difficult to pinpoint your competition precisely. It's also difficult to assess competitors'
relative sizes because a company's nearest competitor could be much larger or smaller than yours. Next,
marketing communication tactics for market leaders and market followers are undoubtedly different, and
budgeting based on parity may thus be unwise. This strategy is unable to adequately account for rapid changes
in competitive activity or aims. It does not take into account the company’s own objectives.
3. Budgeting with the objective and task method
• This strategy focuses on identifying marketing objectives first, then determining the marketing
communication tasks required to meet those objectives. A budget can be made by calculating the costs of these
tasks.
• Advantages: This strategy focuses on marketing goals. The resources are allocated in accordance with the
goals.
• Disadvantages: Implementing this strategy is tough since defining the objectives and quantifying the
implementation costs is not always easy. This method also involves a key assumption: that the relationship
between objectives and tasks is well-known and understood.
4. Budgeting with the Percentage of Sales Method
• Marketing communications receive a set percentage of turnover. The amount of money spent on marketing
communications is directly proportional to the amount of money spent on sales. The company looks at rival
allocations and industry averages to determine the exact amount to be awarded. The corporation can use
historical sales to determine the turnover.
• Advantages: This strategy considers a variety of options and allocates expenditures to the objectives.
• Disadvantages: Determining the percentage of sales that must be allocated might be tricky. Competitors may
have a low advertising budget and focus their resources on the sales force, creating a misleading benchmark.
5. Budgeting with Key Performance Indicators
• Determining the campaign budget via some key performance indicators is a process that allows the company
to figure out, in a quick way, how much it can afford to spend on a special promotion. Sometimes this analysis
is called front-end analysis. This analysis is done with simple performance measures such as the cost per sale,
the conversion rate, the cost per inquiry, the marketing cost ratio, or the return on investment. E-mail presents
itself as an effective way to engage customers in a dialogue. As a flexible and consumer-preferred
communication vehicle, e-mail has applications across acquisition, retention, and customer service. Messages
can be tailored to each customer based on her/his stage of the buying process. E-mail also allows customers
to opt-in with their own preferences.
6. Budgeting with the Lifetime Value Method
• The most successful and efficient budgeting would entail reducing expenses to a unit cost basis in order to
concentrate on the value of individual customers and the many values per client. The organization can estimate
continuing customer value rather than just individual sales revenue based on the data in the CRM database.
Knowing each customer's lifetime worth will help the organization to compare the returns on various
marketing expenditures, as well as the return on investment from getting revenue from existing customers vs
new consumers. This allows you to spend your money wisely by focusing on the most profitable tactics.
• Advantages: Using the CRM database information, the organization may more accurately anticipate the cost
of the campaign. At the same time, it effectively distributes resources among strategies by allowing a
comparison of the results of various marketing initiatives.
• Disadvantages: Keeping track of customer values is challenging since most organizations lack transactional
data from customers. The use of customer LTV forecasting as a budgeting tool is still in its infancy.
Furthermore, if the company does not maintain track of past campaign performance outcomes, it will be unable
to compare them to similar campaigns and learn from past mistakes. When the strategy that generates the
highest ROI does not deliver the fastest return, it might be substituted by quicker but lower-return alternatives.
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CHAPTER 12: IMAPCT OF CRM ON MARKETING CHANNELS

1. Discuss, with regard to a firm’s CRM strategy, whether the proliferation of direct channels is just a
current trend or if online channels will someday replace traditional channels completely.
The internet's presence in business and everyday life, particularly new electronic channels, has had a
significant impact on a company's channel alternatives. Consumers take use of this enormous diversity to seek
information and deal directly with the firm, whether through a website, a mobile device, or sophisticated voice
response systems. Computers, travel, literature, and music are just a few of the things that buyers are familiar
with and even prefer to buy online. Firms now have direct access to end customers and can restructure their
interactions regardless of whether the customer has previously purchased from them. When a customer
interacts with a company through a technology-enabled channel, the company can capture and keep all
relevant information about that customer without having to negotiate with, provide incentives to, or train a
third-party channel member, such as a merchant. These channels provide a low-cost alternative with high
coverage, making them a significant pathway to value chain efficiencies. Customers have practically
uniformly accepted online channels as a result of their constant availability and ease, and they have become
valuable sources of precise customer information for businesses.
2. Obi, a German DIY supplier, initially sold through franchise stores, but it just opened an online shop
in November 2010. The implementation of this additional channel resulted in an unhealthy conflict
between Obi and its franchisees, leading to a battle in court. The focal issue was the cannibalization by
the website of sales in the franchise stores, especially due to the low prices charged online. Discuss Obi’s
multichannel design and management. What went wrong?
(Chọn 1 trong 3)
1. Obi's multi-channel architecture let customers to purchase both in a physical store (the franchise) and online.
His goal was to use a variety of techniques to expand his market reach, but he ended up generating intrabrand
competition by offering lower rates online. As a result, product prices in the franchise were put under pressure,
perhaps resulting in a smaller total profit margin. Customer loyalty can be difficult to build in a multichannel
environment because the ability to compare prices across all merchants reduces the customer's search expenses
but increases competition and price wars. There was no management in this scenario, and there was a lack of
function integration across all channels, which may have resulted in increased loyalty. Instead of making
existing consumers more valuable to the company by offering all products at a low price, the online channel
should have offered distinct packages of services that would attract different sorts of clients. As a result, each
channel should have its own strategy while still cooperating.
2. The disagreement that has erupted between the franchises and the Obi German supplier is the result of a
multi-channel design that includes a direct channel via an internet shop and an indirect channel via traditional
brick and mortar stores that provide a physical location. When a low-cost alternative is implemented in a
supply chain and goesuges franchise stores, it can lead to a drop in sales and a loss of customers. Customers
could also go into the business, check the price, and leave. and then compare it to the online price and purchase
it through the internet, resulting in price rivalry and predatory pricing, which could drive franchise stores out
of business or out of the market.
3. The immediate loss in sales produced by this low-cost platform is the source of dispute with Obi franchisees.
However, there is a more pressing issue in management to address. Much of this friction could have been
averted if franchisees had been involved in the platform's development. Management made the wrong decision
by just adopting a platform in the hopes that it would not cause friction. Integration must be consensus in order
for all channels to be successful. This would include the option of in-store pickup as well as a way for stores
to earn a share of sales. When prices are lower elsewhere, brick and mortars will inevitably become
cannibalized. Consumers may use them to physically inspect products, but they are more likely to make
purchases online. A multichannel approach should add value to the entire firm. As a result, in order to establish
a robust strategy for every level, execution should involve all sections of the company
3. Manufacturers such as Henkel or Procter & Gamble are very detached from end customers. Given
the increasing power of retailers, how might they reestablish closer contact with these ultimate
customers?
Companies like Henkel and Procter & Gamble build stronger relationships with their customers by connecting
the company's goals and interests with all channel members. In an indirect channel structure, the focus of
customer relationship management is often on developing a solid working relationship with the channel
member and giving incentives for developing strong relationships with end customers. These large
corporations typically have control over their indirect channels and can ensure that they follow their customer
relationship strategy. However, as the number of private-label items has grown, P&G's ability to supervise
CRM efforts has dwindled.
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(?) Why using extracted databases to implement marketing activities is more effectively than mass
marketing?
• Effective database analysis is important for successful CRM.
• Databases can be categorized based on their main business function-databases managing business and
databases supporting decision-making activities.
• In addition, databases can also be categorized based on the information included in the databases, the
nature of the underlying marketing activities, and database technology. Based on the information
included in the databases, databases can be classified as a customer, prospect, cluster, and enhancement
databases.
• Customer databases identify and profile the best customers and communicate with these customers to
elicit a response. These data allow the companies to market their products to specific customer
segments to achieve higher net marketing contribution.
• Data from active and inactive customers are important to ensure efficient marketing function.
• The prospect database includes information on noncustomers with profiles similar to those of existing
customers. It can be used by marketers to design marketing campaigns to target prospects with the
 intent of acquiring them as new customers. This is done after carefully analyzing the channels through
which the prospects like to receive information.
• Cluster databases include information about small clusters based on geographic reference groups,
affinity groups, and lifestyle reference groups.
• An enhancement database is used to transfer additional information on customers and prospects
avoiding duplications.

(?) What makes CRM the preferred approach to marketing in the modern information age?
• Growing proof of profitable impacts of good customer relationships. Continued investments in CRM
practices have confirmed the belief that value exists in targeted customer relationships.
• Improved marketing communication effectiveness. Integrated marketing agencies have made great
progress in improving the effectiveness of their communication activity, with superior database
technology, analysis tools, targeted communications, and performance measurement techniques.
• IT vendors and associated change management consultancies. To IT vendors and change management
consultancies concerned with the technology or process side of customer relationships, CRM
represents a vast arena of untapped potential. Initial demand for stand-alone products—such as sales
force automation, marketing campaign management, or call center management tools—has given way
to requests for integrated, strategic CRM solutions.
• Falling costs of data capture and storage.
• Customer value measurement.

(?) Using RFM method to determine the data fields (variables) in the extracted database which will be
used for a marketing campaign.
RFM stands for recency, frequency, and monetary value. This technique utilizes these three metrics to evaluate
customer behavior and customer value and is often used in practice.
- Recency is a measure of how long it has been since a customer last placed an order with the company.
- Frequency is a measure of how often a customer orders from the company in a certain defined period.
- Monetary value is the amount that a customer spends on an average transaction.
For example:
For the following discussions about RFM coding, consider the example of a firm with a customer base of
400,000 customers. From this customer base, a sample of 40,000 customers is chosen. Also, assume this firm
is planning to send a marketing mailer campaign of a $150 discount coupon to be mailed to its customers.
Recency Coding
Assume this firm sends its $150 mailer campaign to the 40,000 customers in the test group, and assume that
808 customers (2.02% of 40,000) responded. In order to determine if there is any correlation between those
customers who responded to the mailer campaign and their corresponding historical recency, the following
analysis is done. The test group of 40,000 customers is sorted in descending order based on the criterion of
most recent purchase date. The earliest purchasers are listed on the top and the oldest are listed at the bottom.
The sorted data are further divided into five groups of equal size (20% in each group). The top-most group is
assigned a recency code of 1, the next group is assigned a code of 2, and so on, until the bottom-most group
is assigned a code of 5. An analysis of the customer response data from the mailer campaign and the recency-
based grouping point out that the mailer campaign received the highest response from those customers grouped
in recency code 1, followed by those grouped in code 2, and so on.
Frequency Coding
To sort the test group of 40,000 customers based on the frequency metric, we need to know the average number
of purchases made by a customer per month. Of course, the choice of the appropriate time period depends on
the usual frequency of purchases (e.g., weeks, months, quarters, years, etc.). In this case, customers with the
highest number of purchases per month are grouped at the top, while those with lower number of purchases
per month were listed below. The sorted list is grouped into five quintiles. Those in the top are assigned a code
of 1 and those at the bottom a code of 5. An analysis of the customer response data from the mailer campaign
and the frequency-based grouping show that the mailer campaign received the highest response rate from
those customers grouped in frequency code 1, followed by those grouped in code 2, and so on.
Monetary Value Coding
To sort the test group of 40,000 customers based on the monetary value metric, we need to know the average
amount purchased per month. As with recency and frequency, the customer data are sorted, grouped, and
coded 1 to 5. The highest response rate for the campaign was from those customers in the test group who had
the highest monetary value quintile. Thus, indicating that the monetary value is also an important metric for
the analysis of customer behavior.
After performing the three steps (R, F, and M) you will have individual R, F, and M scores for each customer.
Each customer will be assigned to one of the 125 groups such as 111, 233, 432, ...,555, based on her respective
RFM code.
Chapter 1:
Cau1: Important part of CRM
- An Important part of CRM is :
+ to identify different types of customers
+ to develop specific strategies to interact with them.
- Examples of such specific strategies are:
+ Better relationships with profitable customers
+ Locating and enticing new customers that will be profitable
+ Finding appropriate strategies to deal with unprofitable customers, including the termination of
relationships
- Customer Value: The economic value of the customer relationship to the firm – expressed on the
basis of contribution margin or net profit
- CRM is the practice of analyzing and utilizing marketing databases and leveraging communication
technologies to determine corporate practices and methods that will maximize the lifetime value of
each individual customer to the firm
- Using a customer value based approach to CRM yields several benefits:
+ Decreased Costs
+ Maximized Revenues
+ Better profits and return on investment (ROI)
+ Acquisition and retention of profitable customers
+ Reactivation of dormant customers
- Conceptualizations of CRM
+ Functional level: focuses on technology
● Developing sales force automation in the sales function
● Developing campaign management in the marketing function
+ Customer facing front-end level: focuses on total customer experience
● Building a single-view of customers across contact channels
● Distributing customer intelligence to all customer-facing functions
+ Strategy level: focuses on customer satisfaction
● Freeing CRM from technological underpinnings
● Describing CRM as a process to implement customer centricity in the market and to build
shareholder value
● Understanding that knowledge about customers affects the entire organization
=> Within this context CRM will be defined from a business strategy perspective
- CRM from a business strategy perspective
CRM is the strategic process of selecting customers that a firm can most profitably serve and shaping
interactions between a company and these customers. The ultimate goal is to optimize the current and future
value of customers for the company.
Cau 2: Key Components of CRM from a Business Strategy Perspective ( giai thich them va cho vidu)
- Strategic process
+ Activities are initiated from the top of the organization
+ CRM activities span multiple organizational functions
+ Continuous efforts towards a customer-centric organization
Ex: An automobile manufacturer's top management initiates a customer-centric approach, involving R&D,
marketing, and customer support teams to collaborate on enhancing the overall driving experience.

- Selection
+ Resource allocation is based on the economic value of customers
Ex: An airline allocates its resources and efforts based on the economic value of customers. They prioritize
loyal, high-value customers by offering exclusive benefits and services to retain their business.

- Interactions
+ Exchange of information and goods between customers and companies evolve as a function of past
exchanges
Ex: An e-commerce platform evolves its user interface based on past interactions with customers. They
continually analyze user behavior and feedback to improve the shopping experience, leading to increased
sales.

- Customers
+ Including end-users and intermediaries such as distributors and retailers
+ Greater fine-tuning of segmentation strategies to eventually target individual customers with
customized product offerings
Ex: A cosmetic brand targets both end-users and intermediaries, such as distributors and retailers. They
gather data to customize products and marketing strategies to cater to individual customer preferences and
the needs of various sales channels.
- Optimizing the current and future value of customers
+ Maximizing customer equity by maximizing profits over a series of transactions
Ex: A telecommunications company focuses on maximizing customer equity. By offering bundled services,
they encourage customers to stay longer, leading to higher profits over time as customers add more services
to their plans.

Cau 3: Relevance of CRM

- Firms are facing changes with respect to:
+ Consumers
+ Marketplaces
+ Technology
+ Marketing functions
CRM is a response to these changes
Cau 4: Why is managing customers critical than ever?
- Changes with Respect to Consumers: They comprise two main subgroups: demo- graphic and
behavioral changes. Demographic changes relate mostly to current developments in the growing
diversity of customers; behavioral changes describe shifts in the way consumers act and react to
market offers.
+ Demographic Changes and Increasing Consumer Diversity: Aging populations, especially in
developed countries Increasing diversity in terms of ethnicity. Increasing individualization
+ Behavioral changes: Time scarcity. Value consciousness and intolerance for low service levels.
Information availability and technological aptitude. Decreased loyalty. Rise of convenience and self-
service. Increased usage of social media

- Changes with respect to the Marketplace

 + More intense competition between firms for customers
+ Fragmentation of markets
+ Diminishing product-quality differentiation
=> To maintain market share, companies need to realign their business strategy to become customer-centric
- Changes with respect to Data Storage Technology
+ Better technology, cheaper and larger storage units
+ Huge increase in demand for data storage
=> Better information about customer behavior and attitudes
=> Better prediction of customer buying behavior
=> Too much data can lead to misapplication and wrong analysis
- Changes with respect to the Marketing Function
+ Media dilution and channel multiplication
● Proliferation of communication media focused on the customer
Direct-to-consumer channels - email, telephone
Interactive media - internet, interactive TV etc
● Reduced need for techniques focused on price alone due to
Availability of new data collection and communication tools Marketing processes such as loyalty programs
+ Decreasing marketing efficiency and effectiveness
● Lower efficiency and effectiveness due to
● Prior focus on price and short-term transactions
● Proliferation of new contact channels
● Increased or flat cost of contact
● Decreased customer response
● Reduced value for advertising in any medium => Pressure on the marketing function
=> Marketing in danger of being restricted to advertising and media planning
Cau 5: Changes with Respect to Consumers:
- Changes with Respect to Consumers: They comprise two main subgroups: demo- graphic and
behavioral changes. Demographic changes relate mostly to current developments in the growing
diversity of customers; behavioral changes describe shifts in the way consumers act and react to
market offers.
+ Demographic Changes and Increasing Consumer Diversity: Aging populations, especially in
developed countries Increasing diversity in terms of ethnicity. Increasing individualization
+ Behavioral changes: Time scarcity. Value consciousness and intolerance for low service levels.
Information availability and technological aptitude. Decreased loyalty. Rise of convenience and self-
service. Increased usage of social media

- Demographic Changes and Increasing Consumer Diversity

+ Aging populations, especially in developed countries
● Falling birth rates
● Median age increases drastically
● Thus, to know the needs of elderly becomes increasingly important
+ Increasing diversity in term of ethnicity
● Closer integration facilitates immigration
● Markets become more segmented
+ Increasing individualization
● Increasing number of working women
● Increasing number of single households as well as single parents

- Behavioral Changes
 + Time scarcity
● Activities compete for customers’ time
● should be wary of placing heavy time demands on consumers
+ Value consciousness and intolerance for low service levels
● Declining consumer satisfaction levels
● Rising customer expectations
+ Information availability and technological aptitude
● Customers become more knowledgeable in making purchase decisions
● Increasing level of comparisons across providers and transactions
+ Increased use of social media
● Enables companies to gain insights and to receive prompt feedback
● Online word of mouth becomes increasingly important
+ Decreased loyalty
● Diversification of holdings across service providers even within the same household
● Need for convenience and the rise of self service
=> Meeting consumers needs becomes the major challenge for companies.
CHAPTER 3:
Cau 1: Elements of CRM

- CRM vision
+ Company needs clear vision of what they aim to achieve with their customer relationship
management efforts
+ CRM vision is to build an organization in a manner that all actions are geared towards maximizing
lifetime value of each customer
+ Involves acquiring and retaining strategically important customers and develop, communicate, and
deliver value propositions that meet or exceed customers expectations

- Culture of Customer Orientation

+ Defined as the set of organizational values, beliefs, and strategic actions that enable the
implementation of customer management principles
 + Characterized by a top management belief and commitment that the customer is at the center of
activity
+ This belief needs to be reflected in the culture, the organizational structure and the reward system to
be credible

- Integration and Alignment of Organizational Processes

+ Comprises organization wide creation and synchronization of processes and systems enabling the
implementation of customer management principles
+ Firmly incorporates needs of the customer and goals of the firm into product and service delivery
+ Strategic CRM works best for organizations that are organized around cross-functional processes
rather than functional silos
+ Characterized by an understanding that value provided to target customers should be what drives all
processes
+ Individual processes work in sync with common goal of attracting and retaining target customers
+ Customer management compatible incentives drive employee and organizational goals
simultaneously
+ Processes are designed in such a manner that they automate a feedback

- Data and Technology Support

+ Collecting and analyzing complex customer information is an important part of CRM
+ Data and technology support as an enabler for effective CRM
+ Characterized by the capability of leveraging data to actionable information
+ Makes customer management processes not only more efficient but also more effective
+ Helps to create entirely new processes and channels based on online and mobile applications
+ Firms that are able to generate intelligence and act on it will derive a competitive advantage

Cau 2: Culture of Customer Orientation( nhớ cho vidu và gthich )

+ Defined as the set of organizational values, beliefs, and strategic actions that enable the
implementation of customer management principles
+ Characterized by a top management belief and commitment that the customer is at the center of
activity
+ This belief needs to be reflected in the culture, the organizational structure and the reward system to
be credible

Cau 3: Steps in Developing a CRM Strategy

1. Gain enterprise- wide commitment
2. Build a CRM project team
3. Analyze business requirements
4. Define the CRM strategy
- Step 1: Gain enterprise- wide commitment
+ Budget allocation for the solution
+ Top down management commitment
+ Bottom-up buy-in from system users
+ Dedicated full-time project team
=> Enterprise-wide Commitment
- Step Two: Build a CRM Project Team
Obtain active representation from:
+ Management - Provide leadership, motivation and supervision
+ IT/ technical personnel – Compare current and envisioned information system, ensure that CRM
system is compatible with existing software applications
 + Sales, marketing and services groups - Evaluate usability of CRM system based on effectiveness,
efficiency and satisfaction
+ Financial staff - Provide critical analysis for assessment of increased sales productivity, evaluation of
operating costs, estimated cost of system expansion and ROI projections
+ External CRM expert - Provide a valuable source of objective information and feedback

- Step Three: Analysis of Business Requirements

Gathering information to:
1. Identify the services and products that are being supported
2. Map current workflows, interfaces, and interdependencies
3. Review existing technologies, features and capabilities
4. Discuss the vision for the business and the operational plan
5. Define business requirements
6. Develop enhanced business workflows and processes
7. Identify gaps in technology functionality
8. Map functionality to business processes
9. Develop a new technology and functionality framework
10. Develop a conceptual design and prototype plan

- Step Four: Define the CRM Strategy

Characteristics of a defined CRM strategy

Cau 4: Management of other Stakeholders ( thêm vidu và gthich)

- Relationships with all stakeholders need to be effectively managed: This suggests that businesses
should not only focus on customer relationships but also on managing relationships with other
stakeholders such as suppliers, partners, and employees. Effective relationship management extends
to all parties involved with the company.

Ex: A car manufacturer maintains strong ties not only with customers but also with suppliers. Good supplier
relationships ensure a steady supply of high-quality parts, benefiting customers with reliable products.

- Management needs to be committed to CRM: To successfully manage these relationships, the

management must be fully committed to Customer Relationship Management (CRM). CRM should
be integrated into the company's culture and strategy.
Ex: In a software startup, founders are dedicated to CRM. They regularly gather user feedback and prioritize
updates accordingly, reflecting their commitment to enhancing the customer experience.

- The product provides a link between the customer and the company: The product or service
offered acts as a bridge between the company and the customer. It's through the product that
interactions and relationships are established and maintained.

Ex: A streaming service's app updates create a direct connection between users and the company.
Improvements in the app enhance user satisfaction and engagement, strengthening the link.

- The importance of each stakeholder depends on the industry or business: The relevance of
different stakeholders varies based on the industry or type of business. For example, suppliers might
be crucial for manufacturing companies, while partners or regulators might be more important in
other industries.

Ex: In the education sector, accrediting bodies hold significance. Educational institutions work closely with
accreditors to meet standards, ensuring the quality of education they provide.

- Customers are the major focus of every CRM strategy as customers are mostly the only source
of revenue: While other stakeholders are essential, customers typically remain the primary focus of
CRM because they are the primary source of revenue. The success of the business depends on
satisfying customer needs and building long-term relationships.

Ex: A coffee shop chain prioritizes its customers by offering a loyalty program and personalized promotions.
This keeps customers coming back, increasing revenue.

CHAPTER 4:
Cau 1: type of CRM Implementation projects
The implementation of the CRM strategy is a pro- cess of planning and executing a series of small CRM
projects. They normally fall into three categories:
1. Operational CRM projects: Enable the com- pany to meet the technical and functional requirements of the
CRM strategy.
2. Analytical CRM projects: Have the objective to obtain a good understanding of the cus- tomer’s needs,
expectations, and behaviors.
3. Application projects: Focus on deploying the operational and analytical outputs to improve marketing
decisions and customer relation- ships.
- Operational Projects
+ Construct infrastructure meeting technical and functional requirements of CRM
+ Don’t directly generate revenue, but provide resources to perform value-added CRM Projections
+ Maximize profitability
+ Reduce support costs
+ Increase sales and customer loyalty

- Analytical Projects
 + Also called Data Analytics
+ Leverages resources created by operational projects
+ Adds value by enabling firms to understand their customers
+ Helps determine customer strategy and development of on-going CRM strategy
+ Major activities:
+ Capturing all relevant customer information – data sourcing
+ Customer data transformation - data warehousing, data integration
+ Customer knowledge discovery - data analysis, prediction based on results

- Deploying Operational and Analytical Outputs

+ No value will be created until this system and the information are applied and utilized to improve the
company's marketing decision making and the company's relationships with its customers
+ Examples:
● Using the analytical results of customer value assessment and customer profiling helps
design marketing campaigns that target the customers or prospects that are most likely
to respond and that provide a high expected value.
● Products or service can be customized based on customer behavior modeling and
customer segmentation to meet their unique expectations
● The planning and forecasting of sales, marketing, and customer service can be improved based on
customer life-cycle patterns (engage, transaction, fulfill, and service) to make the sales and
marketing efforts more focused and efficient
Cau 2: CRM cost ( them vidu va gthich)
Including:
- IT Costs
- People Costs
- Process Costs

- IT Costs
+ One-fifth to one-third of total cost
+ Investment in IT infrastructure, database development and software
Ex: Investment in IT infrastructure: when a company invests in new servers and networking equipment to
support its CRM software, ensuring efficient data storage and processing.
Ex: Database development: A company might spend on developing a comprehensive customer database,
where customer information is collected and organized to facilitate personalized marketing and customer
interactions.

Ex: Software expenses: When a business purchases CRM software, it incurs software expenses. For
instance, a company invests in Sales Force Automation software to streamline its sales processes and
customer interactions.

+ Software categories required for CRM Investment : such as

+ Sales Force Automation
+ Sales Management Automation
+ Call-Center Automation
+ Customer Service Automation § Marketing Automation
+ Operations Management
+ E-commerce Functions
+ Knowledge Management

- People and Process Costs

+ People costs: Recruitment, redeployment and training costs

Ex: Recruitment: The cost of hiring additional staff to manage CRM activities, like hiring customer service
representatives to handle inquiries, demonstrates people costs.

Ex: Training: A company invests in training its employees to use CRM tools effectively. For example, a
retail store trains its sales associates to use CRM software for better customer service and personalized
recommendations

+ Process costs :Market segmentation process, selling process and campaign management process

Ex: Market segmentation: Companies spend on market research and analysis to segment their customer base
effectively. For instance, an e-commerce business conducts surveys and data analysis to understand
customer preferences and tailor their offerings accordingly.

Ex: Selling processes: Streamlining the sales process through automation or software tools involves process
costs. An example is the automation of lead tracking and sales funnels to improve conversion rates.

Ex: Campaign management: Costs associated with planning, executing, and analyzing marketing campaigns,
such as email marketing or social media advertising, fall under process costs. For instance, an online retailer
invests in email marketing software to manage and optimize its email campaigns effectively.

Cau 3: Why Do CRM Implementation Projects Fail?

- Assumption that CRM is a software tool that manages customer relationships for you.
- Implementing CRM before having a CRM strategy.
- Poor match between CRM system and organizational processes.
- Resistance from employees.
- Poor data quality.
- Low “actionability” of the information.

The assumption that CRM is a software tool: Many people assume that implementing CRM is just about
installing software that will automatically manage customer relationships. In reality, CRM is a strategy and a
culture that software can support but not replace.

Implementing CRM without a strategy: Implementing CRM software without a clear CRM strategy in
place can lead to a lack of direction and purpose. A well-defined strategy should guide the implementation
process.
Poor alignment with organizational processes: If the CRM system doesn't align with the existing
processes and workflows within the organization, it can disrupt operations and create inefficiencies.

Employee resistance: Employees may resist CRM implementation for various reasons, including fear of
change, lack of training, or concerns about how it might affect their job roles. Employee buy-in is crucial for
the success of CRM projects.

Poor data quality: CRM relies on accurate and high-quality data. If the data in the CRM system is outdated,
incomplete, or inaccurate, it can lead to incorrect decision-making and hinder customer relationship
management.

Low "actionability" of information: Even if the CRM system collects a vast amount of customer data, if
this information isn't effectively translated into actionable insights, it won't provide value. Organizations
need to ensure that the data collected leads to informed decision-making and improved customer
interactions.

=> These factors can contribute to CRM implementation failures, highlighting the importance of careful
planning, alignment with organizational goals, and addressing challenges like data quality and employee
engagement.

CHAPTER 10:
1. Explain the difference between behavioral and attitudinal loyalty. Provide an example of each.
Behavioral loyalty refers to the observed actions that customers have demonstrated toward a particular
product or service. Attitudinal loyalty instead refers to a customer’s perceptions and attitudes toward a
particular product or service. Ideally, there should be a strong correlation between a customers’
attitudes and behaviors, though in some instances, customer behaviors differ radically from their
attitudinal perceptions about the product or service.
Behavioral Example: If you only have one grocery store in your town, you’re going to exhibit
behavioral loyalty. You’re a repeat customer because you don’t have any other choice.
On the flip side, if you drive past three grocery stores just to get to the nearest Publix, you’re exhibiting
attitudinal loyalty. You have many options, but you’re picking Publix because of what they stand for,
how you’re treated, etc.
Attitudinal loyalty Example: Companies like Apple have the best of both worlds. As you buy more
iDevices and become more dependent on iCloud, switching to Android becomes harder (behavioral). At
the same time, they have millions of raving fans exhibiting attitudinal loyalty.
2. What are the key objectives of loyalty program? Which of these objectives provide the
strongest competitive advantages?
The key objectives of LP:
a) Building true (attitudinal and behavioral) loyalty
b) Efficiency profits
c) Effictiveness profits
d) Value aligment
+ Building true (attitudinal and behavioural) loyalty - This is a function of the value provided to
customers. It encompasses various factors such as: degree of involvement in the product category,
visibility of product usage, or the value expressive nature of the product, etc. None of these aspects can
be controlled by the firm
+ Efficiency Profits - which result from a change in the customer’s buying behavior and can be
measured in several ways (basket size, purchase frequency acceleration, price sensitivity, SCR,
retention, or lifetime duration). Loyalty programs attempt to generate efficiency profits on the
assumption that customers build up switching costs when they accumulate loyalty based assets. This
accumulation encourages them to forgo their free choice, because the expected reward makes this
reduction appear worthwhile.
+ Effectiveness Profits - refers to the medium to long-term profit consequences realized through the
development of better knowledge about customer preferences. The loyalty program is designed to
gather information about customers, their behaviour, and their preferences and then to derive
knowledge of customer preferences and to offer increasingly better-tailored value propositions to
various customers.
+ Value Alignment-aims to match the cost to serve a particular customer with the value that the person
brings to the firm.
The objective that provides the strongest competitive advantage is Effectiveness Profits as it is more
likely to generate sustainable competitive advantage and yield the highest profits in the long run.
3. You are a consulant to a credit card organization that wants to establish a loyalty prpogram.
The CEO has just read abotut how most loyalty programs result in money - losing propositions.
How do you alleviate the CEO's concerns?
As a consultant to a credit card organization that wants to establish a loyalty program, I would alleviate
the CEO's concerns about the profitability of such programs in the following ways:
+ Emphasize the benefits of a well-designed loyalty program: A well-designed loyalty program can
create a sense of customer loyalty and drive repeat business. This can result in increased revenue,
improved customer retention, and higher customer lifetime value.
+ Highlight successful loyalty program case studies: Many successful companies have implemented
loyalty programs that have resulted in increased revenue and customer loyalty. By highlighting these
case studies, I can demonstrate how effective loyalty programs can be when properly designed and
executed.
4.Do companies profit by introducing loyalty program? Is the success of a company's loyalty
program dependent on its industry category?
● Many companies can benefit from implementing loyalty programs. According to Forbes, many
companies make almost 20% of their profits from these programs. The mistake many companies
make is their "put it and forget it" attitude - the attitude of accomplishing anything that you actively
fear and deliberately avoid for these programs without keeping up with your change in the market.
● They simply do not realize that a poorly designed and implemented program can actually destroy
value by spending more than the money they create.
● Companies need to focus on the majority of the factors to make a successful loyalty program
profitable.

- Focus on what is gained and not just who provides repeat visits. The goal of customer acquisition,
which is really profitable, is not just the number of acquisitions.
-Bringing customers to spending structure, providing more rewards for spending more.
-Smart removal of customers with the lowest profit.
- Get back profitable customers who moved, used past purchase data, etc.
-Increasing the lifetime value of customers (CLV).
-Building genuine customer relationships based on relevance and relevance
- Establish a more fair pricing policy.
- Smart response to competitive challenges.
- Improve product range and stock options.
- Better business and store layout.
- Reduce advertising and promotion expenses.
- Reduce marketing/advertising costs (email is cheaper than print).
 - Loyal customers directly affect the company's profits.
- Develop a core offer that cannot be denied.
- Affect the level of customer satisfaction.
- Affect the elasticity of purchasing decisions.
- Assess the impact of the market on customer loyalty.
- Use demographic data to predict loyalty.
- Increase the proportion of wallets.
- Promote the brand to build customer loyalty.
- Becoming a true business see customers as the business center.
- Ensuring the success of a loyalty program.
- Detailed planning and careful implementation.
- Rapid market entry with an alliance program.
- Successful implementation of the CRM system.
- Use gift cards and store loyalty cards.
- Use six P's in loyalty marketing.
- Building a database can really create loyalty.
- Avoid technology issues with a loyalty base.
5. How can you measure loyalty? How does loyalty relate to the profitability of a company?
● There are 10 measures of customer loyalty efficiency that will work for all businesses and need to be
carefully monitored to establish a loyalty strategy.
● Share wallet:
-Share Wallet measures the percentage of customer spending in the category that you capture.
-It's a clear measure of great significance - understand it and you'll find it easier to build customers
effectively.
● Lifetime value of customers:
- Data problems can make it difficult for some businesses to quantify, but CLV is a key measure of customer
loyalty, particularly when its performance is monitored over time.
- It also shows how much you can afford to invest in customer relationships.
- Sales per customer
- Sales trends per customer can help you understand the value of customer segments and eliminate the
impact of changes in absolute customer numbers.
● Active customer volume:
-A seemingly basic but important measure of customer loyalty.
- Knowing the number of active customers (and 'activity' can be defined as trading or interacting with your
content) and how these trends will give you an indication of interaction.
● Access frequency:
- Measure how often your customers visit you and you will have an effective measure of customer loyalty.
- They can also visit your competitors, but the frequency of visits is a powerful measure that will help you
increase customer loyalty.
● Recency:
- Spending per customer or access frequency is increasing but if a recent visit - a customer who recently
traded with you - is declining, you could have a serious problem.
● Spending per transaction:
- This measure indicates the level of purchase that customers are making in your business.
- Spending per Transaction may vary due to price changes but also as a result of customers beginning to split
purchases, potentially also spending at competitors.
● Retention rate:
- Calculated by the number of active customers in the most recent period of activity in the previous period.
Retention rates are one of the best measures of customer loyalty.
● Index of participation:
- The measure takes into account the extent to which your customers are actively engaged with you - factors
such as email clicks, offers, offers and referrals can all be important and engagement metrics are often the
sum of fusion of several factors.
● Net Promoter Score:
- Network advertising is a management tool that can be used to assess the loyalty of customer
relationships of a company. It serves as an alternative to traditional customer satisfaction research and is
claimed to correlate with revenue growth.
● How does loyalty relate to a company's profitability:
Customer loyalty means a lot to the company and the profitability ratio tends to increase with customer
loyalty. Loyal customers will have lower service costs than new customers because the transactions have
been carried out according to the familiar route and they are also less demanding at the company, they
propose ideas for products. and services for the company, speak well about the company and its
products, pay less attention to brands and ads of competitors and are less sensitive to prices, buy more
when the company introduces new products and improve the current product quality. Loyalty is
considered to be a major contributor to company profits, an increase in loyalty will help the company
grow more sustainably. Therefore, in order to survive, develop long term and increase profits, it is
necessary to have loyal customers.
6. Would low-item (coffee, candy, sodas) benefit from loyalty programs? What kind of incentives
might work best?
Low-ticket items like coffee, candy, and sodas can certainly benefit from loyalty programs, as they can
help to drive repeat business and encourage customers to choose a particular brand or retailer over
competitors. However, the type of incentives that work best may differ from what is typically offered for
higher-priced items.
Here are a few ideas for incentives that might work well for low-ticket items:
+ Frequent buyer rewards: A simple frequent buyer reward, such as a free item after a certain number of
purchases, can be a powerful incentive for customers to keep coming back.
+ Instant discounts: Offering an instant discount on a customer's purchase can be an effective way to
encourage repeat business, especially if the discount is only available to loyalty program members.
+ Points-based systems: Points-based systems can work well for low-ticket items, as customers can
accumulate points quickly and redeem them for small rewards like a free drink or snack.
+ Digital coupons: Offering digital coupons through a loyalty program can be a convenient way to
incentivize repeat business, as customers can easily redeem the coupon using their mobile device.
+ Exclusive access: Giving loyalty program members exclusive access to new products or limited- time
offers can be a powerful incentive for customers to continue shopping with a particular brand or retailer.
Overall, the key to a successful loyalty program for low-ticket items is to provide incentives that are
tailored to the needs and preferences of the target audience. By offering rewards that are both achievable
and valuable, brands and retailers can drive repeat business and increase customer loyalty.
7. Design a loyalty program for you neighborhood gas station. Describe the incentives. Determine
the cost structure. Set benchmarks and evaluate the profitability of the program across possible
seenarios.
Petrolimex petrol station
• Description of loyalty program: For every VND 30,000 for a gas refill, customers will receive 1 point;
100 points is equivalent to 50,000 VND.
•Offer: Loyalty to a gas station will collect enough points to redeem rewards in cash.
•Cost: VND 50,000 off when customers earn enough points.
• Structure: The structure is built so that it looks appealing to consumers without costing the company/
business. Attract loyal consumers and build a competitive advantage over rivals.
• Benchmark: Competitors in Ho Chi Minh City with this gas station: Revotec, Comeco, ...
Assessing profit scenarios: In order to accurately evaluate the effectiveness of the program, it is
necessary to understand the information about the company, the program, the local competitors and th
current financial situation of the industrygas.
5. How can you measure loyalty? How does loyalty relate to the profitability of a company?
1). Net Promoter Score
Ditch the traditional customer satisfaction surveys. Gauge your customer loyalty with a Net Promoter
Score, which asks one essential question: How likely are you to refer our service? Not only does this let
you know how satisfied a customer is, but it also tests how likely they are to purchase again--without
annoying them with a long list of questions.
2) Repurchase Ratio
The repurchase ratio gives you the number of customers who come back to your business repeatedly,
divided by one-time purchasers.
3) Upsell Ratio
Another indication of customer loyalty is when they buy new products; a symbol of their trust in your
business. This is the reason why businesses track their upsell ratio, which is the ratio of customers
who’ve bought more than one type of product to the customers who’ve bought only one. Don’t confuse
this with the Repurchase Ratio, because this specifically tracks existing customers who buy a new
product.
4) Customer Lifetime Value
The Customer Lifetime Value (CLV) is an understanding of the total revenue attributed to the entire
relationship (including future purchases) with a customer. Not only does this metric helps in identifying
highly valuable customer segments that must be prioritized by your company, but it also encourages
businesses to shift focus from quarterly profits to the long- term health of their customer relationships.
This value is equally important to marketing teams because it allows them to estimate their upper limit
cost for acquiring new customers and understand the time needed to regain the investment made on the
customer.
5) Customer Loyalty Index
The Customer Loyalty Index (CLI) is a standardized tool that is used to track
customer loyalty over time. Even though customer loyalty may be your number one priority, it can’t be
summed up in a single number. This is why CLI takes into consideration multiple factors like NPS,
upselling, and repurchasing.
6) Customer Engagement Score
Another indication of customer loyalty is how heavily they utilize your services, and
how engaged they are with your brand. PeopleMetrics conducted a study based on nearly 10,000 online
interviews which revealed that high-performing companies have a greater focus on customer
engagement levels (62%) than those that perform poorly (46%).
Phần 1: Cho phương trình rồi phân tích + đánh giá
+ Program name:
+ Rules:
+ Key objective: read carefully the goal of the program is retention or acquisition, who is the customer? (e.g.
the goal of stimulating customers to increase their barket size, encouraging customers to buy more products
through program rules), the program will focus on behavioral or attitudinal loyalty. (for example, with such
program rules, these will stimulate behavioral loyalty with the desire for customers to spend more money
and encourage customers to download the company's app to make it easier for customers to easily order and
see offers through notifications, thereby increasing habitual buying behavior)
+ Reward mechanism: analyze whether the program uses transaction-based or engagement-based (for
example, according to transaction based: the company builds a loyalty program with a relatively or high
reward value (depending on the product they give) to the purpose of stimulating customers to buy goods,
and customers to accumulate points and then calculate the number of stamps (for example, a program to
accumulate points to receive stamps) received on the order value, the more they buy, the higher the value,
that encourages customers to keep coming back and shop often at the store -> customer motivation).
+ Reward structure:
Hard reward hay soft reward: (tùy chương trình) – Comment whether the product is suitable for the
company's activities or not, and for what purpose choose this product. (e.g. products that fit the program's
goals, use company (or other company) products to increase sales of all other products).
Product proposition support: Is the product consistent with the company's sustainable development
positioning? What makes the product different from other programs?
Aspirational value of reward: Does this product make customers want to have it or not?
Rate of reward: What is the reward ratio according to the value of each product and the amount of money
that customers use to redeem and what is the maximum? (for example, the reward value/money ratio is very
high and the more money the customer spends on the reward, the more value the customer gets -> this
can attract customers to come to increase the level of desire to own the product)
Tiering of reward: For which customers?
Timing of reward: How long is the program? Long or short, does it make customers bored? (For example,
running the program for too long but if it is not attractive, will make customers forget the existence of the
program and vice versa)
+ Participate requirement: See what are the conditions to participate in the program? For which customers?
How much money can be exchanged for products? (for example, a comment: simple conditions for
participating in the program help customers with low frequency of waste and moderate consumption can
participate in the program)
+ Payment function: What are the conditions when exchanging gifts, what should I do if I want to exchange
gifts? + Sponsorship: Who will pay for everything for this program?
+ Cost and revenue of LPs
+ Tên chương trình:
+ Quy tắc:
+ Mục tiêu chính: đọc kỹ mục tiêu của chương trình là giữ chân hay thu hút, khách hàng là ai? (ví dụ: mục
tiêu kích thích khách hàng tăng quy mô thị trường, khuyến khích khách hàng mua nhiều sản phẩm hơn thông
qua các quy định của chương trình), chương trình sẽ tập trung vào lòng trung thành về hành vi hoặc thái độ.
(ví dụ với các quy định chương trình như vậy sẽ kích thích hành vi trung thành với mong muốn khách hàng
chi nhiều tiền hơn và khuyến khích khách hàng tải app của công ty để khách hàng dễ dàng đặt hàng và xem
ưu đãi qua thông báo, từ đó tăng thói quen mua hàng hành vi)
+ Cơ chế khen thưởng: phân tích xem chương trình sử dụng dựa trên giao dịch hay dựa trên sự tương tác (ví
dụ: theo giao dịch: công ty xây dựng chương trình khách hàng thân thiết có giá trị thưởng tương đối hoặc
cao (tùy theo sản phẩm họ tặng) nhằm mục đích kích thích khách hàng mua hàng, khách hàng tích lũy điểm
rồi tính số tem (ví dụ chương trình tích điểm nhận tem) nhận được trên giá trị đơn hàng, mua càng nhiều giá
trị càng cao, khuyến khích khách hàng. tiếp tục quay lại và mua sắm thường xuyên tại cửa hàng -> động lực
của khách hàng).
+ Cơ cấu khen thưởng:
Thưởng cứng hay thưởng mềm: (chương trình) – Nhận xét sản phẩm có phù hợp với hoạt động của công ty
hay không và chọn sản phẩm này với mục đích gì. (ví dụ: sản phẩm phù hợp với mục tiêu của chương trình,
sử dụng sản phẩm của công ty (hoặc công ty khác) để tăng doanh số bán tất cả các sản phẩm khác).
Hỗ trợ đề xuất sản phẩm: Sản phẩm có phù hợp với định vị phát triển bền vững của công ty không? Điều gì
làm cho sản phẩm khác biệt với các chương trình khác?
Giá trị mong muốn của phần thưởng: Sản phẩm này có khiến khách hàng muốn sở hữu nó hay không?
Tỷ lệ thưởng: Tỷ lệ thưởng theo giá trị từng sản phẩm và số tiền khách hàng dùng để quy đổi là bao nhiêu
và tối đa là bao nhiêu? (ví dụ: tỷ lệ giá trị phần thưởng/tiền rất cao và khách hàng chi càng nhiều tiền cho
phần thưởng thì khách hàng càng nhận được nhiều giá trị -> điều này
có thể thu hút khách hàng đến để tăng mức độ mong muốn sở hữu sản phẩm)
Phân cấp thưởng: Dành cho khách hàng nào?
Thời gian trao thưởng: Chương trình kéo dài bao lâu? Dài hay ngắn có làm khách hàng nhàm chán? (Ví dụ
chạy chương trình quá lâu nhưng nếu không hấp dẫn sẽ khiến khách hàng quên đi sự tồn tại của chương
trình và ngược lại)
+ Yêu cầu tham gia: Xem điều kiện để tham gia chương trình là gì? Dành cho khách hàng nào? Có thể đổi
được bao nhiêu tiền cho sản phẩm? (ví dụ: một nhận xét: điều kiện đơn giản để tham gia chương trình giúp
khách hàng có tần suất lãng phí thấp và tiêu dùng vừa phải có thể tham gia chương trình)
+ Chức năng thanh toán: Điều kiện khi đổi quà là gì, muốn đổi quà tôi phải làm như thế nào? + Tài trợ: Ai
sẽ chi trả mọi chi phí cho chương trình này?
+ Chi phí và doanh thu của LP
Phần 2: Viết một chương trình
1. CASE: DÀNH CHO SIÊU THỊ, CỬA HÀNG BÁN ĐỒ GIA DỤNG
+ Tên chương trình: Accumulate points - collect stamps to exchange gifts with (company name, business)
+ Thể lệ: Conditions for receiving points: invoices from 100,000 VND (excluding the payment by trade
discount) will immediately receive 01 cumulative point, bills of 200,000 VND receive 02 stamps, invoicese
300,000 VND receive 03 stamps. Customers accumulate enough points to convert into stamps, to exchange
for rewards specializing in home appliances at the store.
Paring knife: 10 stamps
Scissors: 15 stamps
Cutting board: 28 stamps
Combo set of 3 (paring knife, scissors, cutting board): 60 stamps
+ Key objective: effectiveness profits (encourage customers to come back and buy again, the more points
they buy, the bigger the reward points, which can be exchanged for many valuable products that are suitable
for the needs of households). The program was created with the goal of retaining customers because the
rewards are easily achieved with household spending and the program is only applicable to customers who
are members before 24 hours when the program starts. Behavioral customer acquisition program.
+ Reward mechanism: transaction-based (accumulate points on the total bill, use bonus points to redeem
necessary gifts in the kitchen -> help customers save money to own necessary items in housewives'
kitchens.)
+ Reward structure:
Hard reward: kitchen utensil set
Rate of reward:
- Paring knife: 299K/1000k= 30%
- Drag: 399k/ 1500k = 26.6%
- Cutting board: 799k / 2800k= 28.5%
- Combo set of 3 (delivery of sharpening, cutting board, scissors): 1tr499k/5000k = 29.98%
Tiering of reward: There is no reward classification by rank when participating in the program, the rewards
in all ranks are the same.
Timing of reward: The program starts from July 12, 2023, to October 20, 2023, and ends to exchange
stamps from July 12, 2023, to October 31, 2023.
+ Participate requirement: Customers who own membership cards before July 11, and members with
bronze, silver, gold, platinum cards... and the total invoice value of over 100,000 VND of each invoice will
not include the payment value after: (The program applies to customers who make a membership card for
the first time – DÀNH CHO KHÁCH HÀNG MỚI)
No part of payment for shipping, or other service charges.
Trade discounts and coupon payments are not included.
+ Payment function: For each customer's bill over 100k, the system accumulates points and when converted
into stamps for customers to redeem, customers only need to meet the staff, choose the reward, then read the
phone number to accumulate points. can perform the reward operation.
+ Sponsorship: Company XYZ
2. CASE DÀNH CHO CTY MĨ PHẨM, SHOP QUẦN ÁO
+ Program name:
+ Rules: Conditions for receiving:
With an invoice from 300k (excluding the payment by trade discount), customers will receive 1 bottle of
makeup remover with a capacity of 200ml.
With a bill of 500,000 VND (excluding payment by commercial discount), customers will receive 1 bottle
of makeup remover with a capacity of 500ml.
+ Key objective: effectiveness profits (bring satisfaction and good experience to customers, focusing on
customer experience will bring a more favorable view of the store), the program is only applicable to
customers who are members 24 hours before the program begin. Behavioral customer acquisition program.)
+ Reward mechanism: transaction-based (bringing convenience to customers, helping customers focus more
money on the store)
+ Reward structure:
Hard reward: makeup remover bottle
Rate of reward:
- 200ml: 99k/300k = 33%
 - 500ml: 199K/500k = 39.8%
Tiering of reward: There is no reward classification by rank when participating in the program, the rewards
in all ranks are the same.
Timing of reward: The program starts from July 12, 2023, to October 20, 2023, and ends to exchange
stamps from July 12, 2023, to October 31, 2023.
+ Participate requirement: member customers and customers who own membership cards before the
program date (July 11, 2023). Total value must be from 300,000 on each invoice, and will not be added to
other customers' invoices together.
+ Payment function: When receiving the payment invoice, the staff will automatically convert the amount on
the invoice to the reward, and the customer will be given a reward product without any other action.
+ Sponsorship: cosmetic company
3. CASE CÔNG TY VỀ MUA SẮM
+ Program name
+ Rules: customers post articles to share their feelings about the company, purchase experience, and
comments with a hashtag of the program name, and a hashtag of the company name. Each post participating
in the program is considered valid when there are enough hashtags.
+ Key objective: true loyalty
+ Reward mechanism: interaction (customers will interact with the company's page along with sharing their
feelings about the quality of products and services)
+ Reward structure:
Hard reward: purchase voucher worth up to 150k for bills over 250k
Rate of reward: 150K/100k = 150%
Tiering of reward: without distinction
Timing of reward: 13/7-27/7
Participate requirement: Customers need a post with hashtags
Payment function: When going to the store to receive the reward, the customer needs to show his post to
the staff, after it is confirmed as valid and satisfactory, the customer will receive the reward of the program.
+ Sponsorship: procurement company
15. If you were a CEO of a company serving about 200 customers and want to acquire more than 50
potential customers this year, which option would you choose to implement CRM in your company?
Why?

I will choose the Outsourcing creation of software plan because this is a small-sized company without
spending too much on CRM so this is the best option for the current company. Because the upfront costs are
lower than in the other two approaches. Companies do not need to pay for software licenses and hardware
systems. The firm does not need to recruit or develop internal IT skills to manage the new CRM solution.

8. Viết campaign cho: Imagine you are the manager of a chain of 10 coffee shops in Ho Chi Minh City.
You are planning a campaign to attract new customers and your available budget is 3 billion VND.
Describe how you would go about implementing this campaign.
CASE: DÀNH CHO THU HÚT KHÁCH HÀNG MỚI
As the manager of a chain of 10 coffee shops in Ho Chi Minh City, I built a campaign to attract new
customers with a budget of 3 billion as follows:
Campaign Planning and Development
Suppose, in the chain's database, the customer group with the highest RFM, which brings a lot of profit to the
coffee chain, has the common characteristics of having a preference for strong coffee, a preference for green
spaces, and drinking water. The period from 7 am to 10 am.
+ Setting objectives and strategies
With the goal of attracting new customers, and at the same time we are a chain of 10 stores, we already have a
little reputation so:
Objectives: Market Extension (Suppose, in the chain's database, the customer group with the highest RFM,
bringing the most profits to the coffee chain, has the common characteristics of having a preference for strong
coffee, and space. lots of greenery, drink between 7 am and 10 am.)
Strategies: Building the program "Explore green space, quickly and receive gifts" + Identifying customer
segments:
The prospect has the following characteristics:
-Hobbies to drink strong coffee, like the green space, usually drink between 7am and 11am
Target audience: office workers, students living and working in Ho Chi Minh City.
+ Developing the communication strategy: Communication: Integrated marketing communication. (IMC)
Interact through channels including
Facebook: Promote interesting articles and videos about the program.
Website: Design a friendly website, the interface creates a feeling of nature and peace. Tik Tok: Record
videos related to the program.

Write articles related to the program in newspapers.

Offer: Free 1 cup of coffee for new customers when they first visit the store.
Give away 1 sedge bag with logo printed to old customers when introducing new friends.
Get a 15% discount vocher when taking photos with space and check-in on Facebook with hashtags.
Rewards worth 500k, 200k, 100k for 3 customers with the highest post interaction.
+ Compaign Budget: Preset Budgeting 3 billion VND
- Edit website interface and upgrade website experience: 50 million.
- Advertising on Facebook: 500 million/3 months
- Hire 10 influential KOIs in the F&B industry through the restaurant space: 500 million VND
(Tik Tok is very very famous: from 15-50 million, Tik tok is famous for review: 8-13 million, less famous but
also influential <8 million)
- Advertising on TikTok: 300 million VND
- Hired to write articles in 2 newspapers: 50 million.
- Incentives and gifts: 500 million.
- Decor 10 shops: 1 billion VND
-Other expenses: 200 million VND
Implementation and Coordination
+ Campain program: The program "Explore green space, quickly and receive gifts"
Applicable to all guests when coming to the coffee chain.
+ Rules: Each customer when checking in at the store with the shop space with the hashtag is given 1 vocher
15 % discount for any 1 glass of water.
+ Vote for the most favorite article, the 3 customers with the highest interaction will receive cash rewards
worth: 500k, 200k and 100k.
+ New customers, first time to experience check-in, will be given 1 free coffee.
+ Old customers who refer new friends will be given a super nice logo printed sedge bag.
Time: December 2023 - March 2024.
* Activities to do:
+ Decor: 1 engineer and staff at the shop will decorate, with the materials delivered by the manager but must
follow the concept of the program. Deadline: 11/2023
+ Website interface design: Hire engineers, deadline: 10/2023
+ Promote articles on Facebook: Sale and content writing staff, Start time: November 2023.
+ Hire KOLs to review, dealine 11/15/2023
+ Hire a logo design company to design the logo, due date: Before 11/2023.
+ Training for employees to understand the program, dealine 11/28/2023
*Campaign schedule:
The schedule takes place from December 2023 to March 2024.
May be overlapped with other holiday programs, if it is duplicated, customers can only check-in to receive
vochers, the rest will follow the rules of holiday programs.
If it coincides with other offers, customers can only choose 1 out of 2, not cumulative.

CASE DÀNH CHO KHÁCH HÀNG HIỆN TẠI OR CŨ

As the manager of a chain of 10 coffee shops in Ho Chi Minh City, I built a campaign to retain old customers
with a budget of 1 billion as follows:
Suppose, the store chain already has a membership program, and in the chain's database, the customer group
with the highest frequency, which brings the most profits to the coffee chain, has the common characteristics
of drinking preferences. coffee, like green space, drink from 7am to 10am, like to interact via email.
Campaign Planning and Development
+ Setting objectives and strategies
As a chain of 10 stores, with the goal of retaining customers:
Objecitves: Product Development.
Strategies: Building a program "Instant coffee, get good gifts"
+ Identifying customer segments: Existing customers who have purchased from the store.
+ Developing the communication strategy: Communication: Integrated marketing communication.
- Interactions across channels include:
Facebook: Promote posts related to the program.
Poster: Design content related to the program, placed in the most visible place in the store. Write articles
related to the program in newspapers.
Offer: Get 1 free drink whenever customers buy 5 glasses.
Free 1 bag with super cute logo printed when customers buy from 10 cups.
15% off for old customers when trying the store's new product line.
+ Compaign Budget: Preset Budgeting 1 billion VND - Advertising on Facebook: 240 million/3 months.
- Making posters: 60 million VND
- Incentives and gifts: 400 million.
- Cost incurred: 300 million VND
Implemantation and Coordination + Campain program:
- The program "Instant coffee, receive good gifts immediately"
Applicable to customers who have purchased at the store, when customers buy 1 glass of water, they will
receive 1 accumulation card.
Rules: Each customer who buys 1 cup will get 1 stamp on the accumulator card, 5 stamps will get 1 free cup,
10 stamps will get 1 canvas bag with logo printed.
Customers with accumulated cards, when experiencing the shop's new product lines, will receive a 15%
discount.
Each customer has only 1 loyalty card.
Time: December 2023 - March 2024. * Activities to do:
Design poster and print poster: Hire an engineer, deadline: 11/25/2023
Promote articles on Facebook: Sale and content writing staff, Start time: November 2023. Hire a logo design
company to design the logo, due date: Before 11/2023.

Training for employees to understand the program, dealine 11/28/2023

+ Campaign schedule:
The schedule takes place from December 2023 to March 2024.
May be coincident with holiday programs, and other promotional programs, if it is coincident with these
programs, customers only choose 1 of the offers, not accumulating incentives.

Chapter 18:

Cau 1: Social CRM

Emergence of the social web and peer-to-peer networks/conversations increasingly influence how customers
interact with each other and how businesses use the social media tools to manage customer relationships

1. Popular Social Media Channels:

- Social media platforms like Blogs, e-mail, Social Networking Platforms, Podcasts and Internet
Radio, and others are widely used for CRM activities. They serve as channels for communication,
engagement, and relationship-building with customers.
2. Consumer-to-Consumer Interaction: A New Marketing Portal:

- Social media enables consumer-to-consumer interaction, allowing customers to share their

experiences and opinions about products or services. This peer-to-peer interaction can influence
potential customers' decisions, making it a crucial aspect of CRM.

3. Social CRM Strategies: How to Do It? - Social Strategies: Not Social Tools:

- Successful Social CRM strategies focus on how to engage and nurture customer relationships on
social media, rather than simply relying on the tools. Strategies may include personalized messaging,
content creation, community management, and data analytics to gain insights into customer behavior.

4. Sentiment Analysis:

- Social media provides a wealth of data that can be analyzed to gauge customer sentiment. Sentiment
analysis tools can help businesses understand how customers feel about their products or services.
This information is invaluable for adapting CRM strategies and addressing customer concerns.

=> In summary, popular social media channels have a significant impact on CRM activities by providing
platforms for customer engagement, enabling consumer-to-consumer interactions, guiding CRM strategies,
and offering sentiment analysis to better understand and serve customers. Social CRM goes beyond just
using social tools; it involves developing effective strategies to build and maintain customer relationships in
the digital age.

5. A Final Word on Social CRM

- Shift to Collaborative Web: Social media has transformed the web from a communication medium
to one that encourages collaboration, information sharing, and content creation by users.
- Empowering Consumers: Consumers can now express their opinions and feelings about a company
or its products or services on their own terms through social media.
+ Example: Consumers can leave reviews and ratings for a restaurant on platforms like Yelp or post
comments about a product they purchased on social networks like Facebook.
- Valuable Consumer Insights: Social CRM allows companies to gain valuable insights into
consumer behavior and decision-making through analytics.
+ Example: Analyzing social media mentions, a company can identify which product features are most
important to customers based on their discussions.
- Bridging Communication Gaps: Social media bridges the communication gap between consumers
and companies in various markets, including B2C (Business to Consumer), B2B (Business to
Business), and C2C (Consumer to Consumer).
+ Example: Customers can directly message a company on platforms like Twitter to seek help or ask
questions, enhancing real-time communication.
- Evolving Marketing Approaches: Formal marketing methods are being reevaluated as social
interactions play a more significant role in business operations.
+ Example: Traditional advertising methods are complemented by influencer marketing, where
companies collaborate with social media influencers to promote their products.

Cau 2: Popular Social Media Channels (thêm ví dụ thực tế )

- Blog:

• Blogs have undergone significant development in the past two decades since their emergence in the
1990s.
• Initially, blogs were used for personal thoughts and diaries but later became a popular trend. (E.g
LiveJournal, Blogger, WordPress, and TypePad)
• Blog content transitioned from politics to current event analysis and popular culture. Companies
joined the blogging trend to engage with customers and gather their feedback on brands and
products.
 • However, the use of blogs started declining in 2014, with a shift towards other social media
platforms such as Instagram and Twitter.
• Micro-blogging websites like Twitter became a crucial channel for communication between
companies and customers. Many Fortune 500 companies have corporate Twitter accounts to interact
with customers and collect feedback.

- Email:

• Email remains a popular and highly profitable form of direct marketing.

• Despite the growth of social media, email continues to exist and is increasingly invested in for
improvement.
• Email marketing is cost-effective and contributes to revenue.
• Email open rates and customer acquisition effectiveness are better than social media.
• Companies should engage in smart email delivery techniques and optimize email marketing.
• The intensity and content of email direct marketing programs influence customer decisions.
• The competitive online shopping market creates a demand for effective email marketing.

- Social Networking Platforms:

• The internet and social media have transformed how people shop, watch movies, listen to music, and
engage in social communication.
• Social media has become a crucial marketing channel for businesses, with an ever-increasing user
base.
• Facebook plays a major role in the growth of advertising revenue on social media platforms.
• Social media marketing has been recognized as effective in customer retention and achieving sales
goals.
• Social media offers various benefits, such as customer identification and targeting, brand awareness,
and customer relationship building.
• Companies like Papa John's, Red Bull, and Target have used Facebook to enhance their brand
awareness through unique strategies and approaches.

- Podcasts and Internet Radio:

Opportunity:
• The use of podcasts is on the rise.
Challenges:
• Difficulty in measuring the number of podcast listeners and quantifying the number of listeners who
listen to advertisements.
• High costs with no guaranteed benefits.
• Selecting and determining which podcasts will communicate effectively with the target market is
challenging.

- Mobile Applications:

Opportunity:
• Mobile applications are now occupying a significant portion of users' time rather than web access.
• Despite a slowdown in the growth rate due to the large number of applications on the market, mobile
app usage is still increasing significantly.
• The growing number of mobile apps provides opportunities to serve their customer segments, and it
offers marketing opportunities for companies.

- Challenges:
 • Difficulty in quantifying the number of mobile app users and the number of users who use the app.
• High costs and uncertainty in terms of return on investment, as investing in mobile apps can be
expensive.
• Selecting the right mobile apps and continuously updating them can be a challenge for companies.

- Viral Video:

• Viral videos have become a user-driven media platform, where marketers aim to create shareable
content.
• Many companies have shifted their advertising budgets from traditional TV to digital advertising,
particularly in the realm of viral videos.
• Brands use viral videos to strengthen brand awareness and connect emotionally with consumers,
such as Subaru's campaign creating dog-related videos to tap into consumer emotions and drive sales
growth.

- Social Coupons:

• Social coupon websites like Groupon and LivingSocial initially gained popularity due to the
economic downturn and consumer frugality.
• Companies used these platforms to attract new customers but realized that customers relied on
discounts and created short-term business.

Opportunity:

• The decline in deal offerings on coupon websites pushed Groupon and LivingSocial to adopt
different strategies to create long-term value for both consumers and businesses.
• Digital coupon websites like RetailMeNot have gained significant popularity, offering benefits to
consumers and businesses through digital discount codes and tracking their effectiveness.
• The rapid growth of digital coupon codes has the potential to motivate consumers to shop.

Cau 3: Privacy Issues and Concerns

- Database CRM
Introduction:
CRM Databases: Introduction to the significance of databases related to customer interactions with the
company and how they can be used in marketing.
- Cloud Computing: Benefits of Cloud Computing: Cloud computing refers to the technology model
that allows access to and sharing of computer resources, data, and applications via the internet. This
offers significant benefits to the CRM field.
Example: A company uses cloud-based CRM services to store customer information and manage marketing
campaigns. They don't need to invest in on-premises hardware and software, helping them save costs and
focus on improving customer relationships.
- Cloud-based CRM Applications: The convenience and effectiveness of using cloud-based CRM
applications are becoming increasingly popular. These applications enable businesses to access
customer data from anywhere at any time, facilitating more efficient customer interactions.
Example: A sales representative uses a cloud-based CRM application on their mobile phone to access
customer information and update details after a meeting with a client.
- Overview of Cloud Computing Growth: The rapid expansion of cloud computing is driving the
deployment of various cloud-related projects and predicting the associated costs.
Example: A company plans to migrate its entire CRM system to a cloud-based platform in the future to take
advantage of remote data access and reduce database management costs.
• The development of cloud computing and database information management has raised questions
and concerns from both businesses and consumers regarding the privacy and security of content.
 • Issues such as identity theft and personal privacy have emerged.
• Security measures are being implemented, including the issuance of credit and debit cards with chip
technology to minimize risks.
• Online companies are using "cookies" to collect user information.
• Online marketers and researchers need to ensure customers that their personal information is secure
and provide protection measures in case of data breaches.

Focus on customer-centric instead of product-centric strategies

Moving from a product-centric to a customer-centric model means shifting the focus of a business or
organization from primarily emphasizing its products or services to prioritizing the needs and preferences of
its customers. In a product-centric model, the company's primary goal is to develop and market its products,
often assuming that customers will buy them because of their features and qualities. However, in a
customer-centric model, the company places a higher emphasis on understanding its customers, their
preferences, and their overall experience with the brand. This shift is driven by the recognition that building
strong and lasting customer relationships is crucial for sustainable success.

In a customer-centric approach:

• Customer Needs: The company actively seeks to understand its customers' needs, expectations, and
pain points. This information is used to guide product development and service improvements.
• Personalization: The company tailors its products, services, and marketing efforts to individual
customers or customer segments. This personalization can enhance the customer experience and
increase loyalty.
• Customer Feedback: Continuous feedback and communication with customers play a vital role in
shaping the company's offerings and strategies.
• Customer Lifetime Value: The focus is on long-term relationships with customers rather than one-off
sales. Building loyalty and retaining customers become primary objectives.
• Customer Journey: Understanding the customer journey, from initial awareness to post-purchase
support, helps in creating a seamless and positive experience at every touchpoint.
• Data and Analytics: Companies rely on data and analytics to gain insights into customer behavior,
preferences, and trends. This data-driven approach informs decision-making.
• Customer Satisfaction: The ultimate goal is not only to sell products but to ensure that customers are
satisfied, delighted, and willing to become brand advocates.

Transitioning to a customer-centric model often involves changes in culture, processes, and technology. It
requires a deeper commitment to understanding and serving the customer, rather than just selling products.
This shift can lead to improved customer retention, increased customer lifetime value, and sustainable
business growth.

Example: Starbucks - Transitioning from Product to Customer-Centric

• Product-Centric: Previously, Starbucks focused on selling coffee and fixed products like Lattes,
Cappuccinos, and Espressos. They offered a lengthy menu with fixed options they believed would be
appealing to everyone.
• Customer-Centric: Starbucks changed its approach to customers by creating a personalized
experience. Instead of solely selling coffee, they created a friendly community with comfortable
spaces for meeting friends or working. They provided customers with a wide range of choices,
offering hundreds of coffee options and customization features (like milk type, sugar, and
temperature) for each order.
• Personalization: Starbucks used customers' familiar names when calling out orders, creating a sense
of familiarity and personalization. They provided a mobile app for customers to order ahead and earn
points. They tracked shopping habits and offered discounts based on customers' order history.
 • Customer Feedback: Starbucks listened to customer feedback on social media and through surveys.
They used this information to adjust the menu, improve service, and even develop new products
based on customer preferences.
• Lifetime Customer Value: By creating a positive and personalized experience, Starbucks fostered
long-term customer loyalty. Customers return to Starbucks not just for the coffee but also for the
overall experience and sense of familiarity.

This transition helped Starbucks build a strong community and drive sustainable growth, not only in coffee
sales but also in building lasting relationships with customers.

Tập trung vào chiến lược lấy khách hàng làm trung tâm thay vì chiến lược lấy sản phẩm làm trung tâm
Chuyển từ mô hình lấy sản phẩm làm trung tâm sang mô hình lấy khách hàng làm trung tâm có nghĩa là
chuyển trọng tâm của một doanh nghiệp hoặc tổ chức từ việc chủ yếu nhấn mạnh vào sản phẩm hoặc
dịch vụ của mình sang ưu tiên các nhu cầu và sở thích của khách hàng. Trong mô hình lấy sản phẩm
làm trung tâm, mục tiêu chính của công ty là phát triển và tiếp thị sản phẩm của mình, thường giả định
rằng khách hàng sẽ mua chúng vì tính năng và chất lượng của chúng. Tuy nhiên, trong mô hình lấy
khách hàng làm trung tâm, công ty chú trọng hơn vào việc hiểu khách hàng, sở thích và trải nghiệm
chung của họ với thương hiệu. Sự thay đổi này được thúc đẩy bởi nhận thức rằng việc xây dựng mối
quan hệ khách hàng bền chặt và lâu dài là rất quan trọng để đạt được thành công bền vững.
Với cách tiếp cận lấy khách hàng làm trung tâm:
Nhu cầu của khách hàng: Công ty tích cực tìm cách hiểu nhu cầu, mong đợi và những điểm khó khăn
của khách hàng. Thông tin này được sử dụng để hướng dẫn phát triển sản phẩm và cải tiến dịch vụ.
Cá nhân hóa: Công ty điều chỉnh sản phẩm, dịch vụ và nỗ lực tiếp thị của mình cho phù hợp với khách
hàng cá nhân hoặc phân khúc khách hàng. Việc cá nhân hóa này có thể nâng cao trải nghiệm của khách
hàng và tăng lòng trung thành.
Phản hồi của khách hàng: Phản hồi và liên lạc liên tục với khách hàng đóng một vai trò quan trọng
trong việc định hình các dịch vụ và chiến lược của công ty.
Giá trị lâu dài của khách hàng: Trọng tâm là mối quan hệ lâu dài với khách hàng thay vì bán hàng một
lần. Xây dựng lòng trung thành và giữ chân khách hàng trở thành mục tiêu chính.
Hành trình của khách hàng: Hiểu hành trình của khách hàng, từ nhận thức ban đầu đến hỗ trợ sau mua
hàng, giúp tạo ra trải nghiệm liền mạch và tích cực ở mọi điểm tiếp xúc.
Dữ liệu và phân tích: Các công ty dựa vào dữ liệu và phân tích để hiểu rõ hơn về hành vi, sở thích và xu
hướng của khách hàng. Cách tiếp cận dựa trên dữ liệu này cung cấp thông tin cho việc ra quyết định.
Sự hài lòng của khách hàng: Mục tiêu cuối cùng không chỉ là bán sản phẩm mà còn đảm bảo rằng
khách hàng hài lòng, hài lòng và sẵn sàng trở thành người ủng hộ thương hiệu.
Việc chuyển đổi sang mô hình lấy khách hàng làm trung tâm thường kéo theo những thay đổi về văn
hóa, quy trình và công nghệ. Nó đòi hỏi sự cam kết sâu sắc hơn để hiểu và phục vụ khách hàng, thay vì
chỉ bán sản phẩm. Sự thay đổi này có thể dẫn đến cải thiện khả năng giữ chân khách hàng, tăng giá trị
trọn đời của khách hàng và tăng trưởng kinh doanh bền vững.
Ví dụ: Starbucks - Chuyển đổi từ sản phẩm sang lấy khách hàng làm trung tâm
Lấy sản phẩm làm trung tâm: Trước đây, Starbucks tập trung bán cà phê và các sản phẩm cố định như
Lattes, Cappuccinos và Espressos. Họ đưa ra một thực đơn dài với những lựa chọn cố định mà họ tin
rằng sẽ hấp dẫn mọi người.
Lấy khách hàng làm trung tâm: Starbucks đã thay đổi cách tiếp cận khách hàng bằng cách tạo ra trải
nghiệm cá nhân hóa. Thay vì chỉ bán cà phê, họ tạo ra một cộng đồng thân thiện với không gian thoải
mái để gặp gỡ bạn bè hoặc làm việc. Họ cung cấp cho khách hàng nhiều lựa chọn, cung cấp hàng trăm
lựa chọn cà phê và các tính năng tùy chỉnh (như loại sữa, đường và nhiệt độ) cho mỗi đơn hàng.
Cá nhân hóa: Starbucks sử dụng những cái tên quen thuộc của khách hàng khi gọi món, tạo cảm giác
quen thuộc và cá nhân hóa. Họ cung cấp một ứng dụng di động để khách hàng đặt hàng trước và tích
điểm. Họ theo dõi thói quen mua sắm và đưa ra các chương trình giảm giá dựa trên lịch sử đặt hàng của
khách hàng.
Phản hồi của khách hàng: Starbucks lắng nghe phản hồi của khách hàng trên mạng xã hội và thông qua
các cuộc khảo sát. Họ sử dụng thông tin này để điều chỉnh thực đơn, cải thiện dịch vụ và thậm chí phát
triển sản phẩm mới dựa trên sở thích của khách hàng.
Giá trị trọn đời của khách hàng: Bằng cách tạo ra trải nghiệm tích cực và được cá nhân hóa, Starbucks
đã nuôi dưỡng lòng trung thành lâu dài của khách hàng. Khách hàng quay trở lại Starbucks không chỉ vì
cà phê mà còn vì trải nghiệm tổng thể và cảm giác quen thuộc.
Quá trình chuyển đổi này đã giúp Starbucks xây dựng một cộng đồng vững mạnh và thúc đẩy tăng
trưởng bền vững, không chỉ về doanh số bán cà phê mà còn trong việc xây dựng mối quan hệ lâu dài
với khách hàng.