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1
Ogilvy Interactive Team
Customer Relationship Management (CRM)
Vladimir M Jordanov
December 2nd, 2000
Oglivy Interactive Beijing Boot-camp
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Customers?
Who are these guys?
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What is CRM?
In-depth analysis of customer behavior and attributes.
Applying of the achieved knowledge in the formulation of marketing campaigns, strategies and treatment plans.
More than just a set of technologies – it is a process.
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Why CRM?
Company existence – quest for profit.
Three ways to increase the profitability of the customer base
Acquire more customers
Optimize the value of the existing customers
Retain the right customers longer
Acquiring new customer cost 5-10 times more that retaining the existing one
Loyal customers will will buy more and are willing to pay premium prices
20/80 rule – 20% of the customers generate 80% of the revenue
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Why CRM? (continued)
Service leaders enjoy the following advantage over their low-service competitors:
They grow twice as fast.
They experience a 6% annual growth vs. a 1% share loss (they take customers away from their competitors).
They can charge 10% more from their products and still take customers away.
They enjoy 12% vs. 1% average return on sales.
Industry statistics show that 68% of customers walk away because of poor customer service.
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Evolution of CRM
Mass Marketing
Target Marketing
CRM
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Mass Marketing
Replaced the intimacy of direct sales
One way communication
Wide geographic distribution
Lost is the personal touch with the customer
Mass marketing was enabled trough the technological improvements in TV, radio, printed press
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Target Marketing
Direct mail, telemarketing
Receiving customer response
Lack of specific data, average response rate
Islands of information
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CRM
Next evolutionary step, back to intimacy
Customer loyalty build on:
Understanding of customers wants, needs and values
Interactivity with the customer in the way customer prefer
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CRM Cycle
Assess
Who are the customers – demographics and lifestyle?
Where do they li
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