Customer Relationship Management: Concepts and Technologies
Customer Relationship Management: Concepts and Technologies
Customer
Relationship
Management
Concepts and Technologies
2
Customer portfolio definition
3
Objectives of Customer Portfolio Management (CPM)
▰ Fewer in number
▰ Bigger in size
▰ Closer relationships with suppliers
▰ Derived demand
▰ Professional buying
▰ Direct purchase
5
Basic disciplines for CPM
▰ Market segmentation
▰ Sales forecasting
▰ Activity-based costing
▰ Customer lifetime value estimation
▰ Data mining
6
Market segmentation definition
7
Market segmentation process
8
9
CRITERIA FOR
SEGMENTING
BUSINESS MARKETS
IBM targets 18 industry sectors
10
Account-based segmentation variables
▰ Account value
▰ Share of category (share of wallet) spend
▰ Propensity to switch
11
Evaluation of segmentation opportunities
12
Sales forecasting methods
▰ Qualitative methods
▻ Customer surveys
▻ Sales team estimates
▰ Time-series methods
▻ Moving average
▻ Exponential smoothing
▻ Time-series decomposition
▰ Causal methods
▻ Leading indicators
▻ Regression models 13
Activity-based costing 1
15
How ABC helps CPM
▰ Clustering techniques
http://www.clusteranalysis4marketing.com/
▰ Decision trees
▰ Neural networks (Machine Based Learning)
▰ How do they get data
▰ https://www.youtube.com/watch?v=Sz_1V3Fn-CE
▰ https://www.youtube.com/watch?v=Oz3b0Qp2Ong
▰ Internet of Things IOT
▰ https://www.youtube.com/watch?v=QSIPNhOiMoE
▰ Big Data
▰ https://www.youtube.com/watch?v=XjmldAL9RQs 17
Neural networks
20
Customer profitability by sales volume quintile
21
Shapiro et al.’s customer portfolio matrix
22
How costs vary between customers
23
Fiocca’s CPM model: step 1
24
Fiocca step 2: Strategic options
25
Additional CPA tools
▰ SWOT analysis
▰ BCG matrix analysis
26
Boston Consulting Group (BCG) matrix
27
Strategically significant customers 1
▰ Benchmark customers
▻ These are customers that other customers follow.
For example, Nippon Conlux supplies the hardware and software for
Coca-Cola’s vending operation. Whilst they might not make much
margin from that relationship, it has allowed them to gain access to
many other markets. ‘If we are good enough for Coke, we are good
enough for you’, is the implied promise. Some IT companies create
‘reference sites’ at some of their more demanding customers.
29
Strategically significant customers 3
▰ Inspirations
▻ These are customers who bring about improvement in the supplier’s
business. They may identify new applications for a product, product
improvements or opportunities for cost reductions. They may
complain loudly and make unreasonable demands but, in doing so,
force change for the better.
▰ Door openers
▻ These are customers that allow the supplier to gain access to a new
market. This may be done for no initial profit, but with a view to
proving credentials for further expansion. This may be particularly
important if crossing cultural boundaries, say between west and east. 30
Seven core customer management
strategies
32