Hello, keropi-ga!
Thanks for your question! I have broken it down into the various
components and the answer follows!
1.Define customer relationship management (CRM)?
The definition of CRM from Real Market.com follows:
http://www.realmarket.com/crmdefine.html
What is CRM?
============
"Simply stated, Customer Relationship Management (CRM) is about
finding, getting, and retaining customers."
"CRM is at the core of any customer-focused business strategy and
includes the people, processes, and technology questions associated
with marketing, sales, and service. In today's hyper-competitive
world, organizations looking to implement successful CRM strategies
need to focus on a common view of the customer using integrated
information systems and contact center implementations that allow the
customer to communicate via any desired communication channel. Lastly,
CRM is a core element in any customer-centric eBusiness strategy."
===
2. How does Martha Rogers'theory of one-to-one marketing relate to
CRM?
Martha Rogers and Don Peppers are credited with the concept of
"one-to-one" marketing.
It is a CRM approach that forges a relationship with one customer at
a time, focusing on their particular product desires and service
needs.
The following excerpt is from "What is One-to-One Marketing?" Managing
Change. (May 2000)
http://www.managingchange.com/onetoone/overview.htm
One-to-One Marketing "is an approach that concentrates on providing
services or products to one customer at a time by identifying and then
meeting their individual needs. It then aims to repeat this many times
with each customer, such that powerful lifelong relationships are
forged. As such it differentiates customers rather than just
products."
"One to One Marketing is more than a sales approach. It's an
integrated approach that must permeate all parts of an organisation:
marketing, sales, production, service, finance, etc.. In fact, One to
One Marketing needs to come the guiding vision that drives the whole
company. One to One Marketing recognises that lifetime values of loyal
customers who make repeat purchases far exceed that of fickle
customers who constantly switch suppliers in search of a bargain. This
is particularly true within financial services where the customer
acquisition costs are very high.
"Whilst at first the concept appears to be only suitable for a niche
market of rich clients, modern information technology, particularly
the new interactive mediums, provide an opportunity to bring
personalised and customised products to the mass market yet at a mass
produced price."
====
To sum it all up, CRM involves various methods and approaches that
deal with the relationship between company and customer.
The One-to-one approach breaks this relationship down to a very
personal level, with the main focus being to forge a "lifetime"
lifetime relationship.
==
From "Much more than Relationship Marketing." Managing Change )1998)
http://www.managingchange.com/onetoone/morerel.htm
"One to One Marketing is far more than the typical Relationship
Marketing initiatives that we see today, with their loyalty cards and
privilege discount. It is based on a new paradigm of collaboration. It
seeks to engage your customers in dialogue, building trust so that
they tell you their needs and aspirations, their problems and ideas.
This is true knowledge management - customer knowledge management!
Because One to One Marketing is built on trust then it requires a long
term view. At each step you need to gather information about clients
and then use that information to provide superior service and
appropriate products that meet their personal needs and circumstances.
Over the long term your customers will become locked-in to your
company. This is not in some coercive way, but because if they were to
switch suppliers they would need to re-teach the new supplier all
about themselves. And because of the lack of establish trust they will
not wish to be immediately too open with their new supplier. But until
they do, they must revert to handling their own affairs at a more
detailed level. This takes time - a commodity that everyone today
seems to find in very short supply.
==
From "One-to-one marketing." Management Tools. Bain & Company.
http://www.bain.com/bainweb/expertise/tools/mtt/one_to_one.asp
One-to-one marketing "stands in stark contrast to mass marketing.
Mass marketing uses a standard product and looks for a customer to buy
it. One-to-One Marketing starts with an individual customer, and then
develops a tailored product offering for him/her."
==
What are some Examples
======================
E-commerce has facilitated the growth of one-to-one marketing because
customer communication is easier to maintain. It has currently
infiltrated many areas of retail, financial, travel and investment
services.
Previously, this type of CRM was reserved for high-ticket product
industries like vehicles and airlines, or in consumer sectors where
interaction with customers was repetitive and frequent, like grocery
shopping.
==
From "One to one marketing- The changing dynamics of marketing."
Prospectus Newsletter (March 2000)
http://prospectus.ie/press/art_one_to_one_p.htm
Amazon.com
**********
Amazon.com is one of the best examples of one-to-one marketing. When
repeat customers visit Amazon.com, they are greeted with personal
information and product suggestions tailored to them, from information
gleaned from past purchases and browsing.
"In the early days of e-commerce Amazon started out offering books
online. From that initial product push they developed an understanding
of what people read enabling them to extend their product range to
include video, music, travel packages and clothing."
First USA Bank
**************
First USA Bank designed a program called "At your request", which is
"a personal assistant, concierge, researcher and travel agent, all in
one".
"The principle behind the service is to become a "trusted agent" for
the banks' credit card customers, ensuring that they are not enticed
away by competitors offering cards with a lower APR. The process is
remarkably simple; credit card customers in good standing for at least
one year are sent an invitation to sign up to the service. Filling in
the Preference Profile, the customer provides information on their
hobbies, favourite magazines, sports and cultural pursuits and details
of family members names and birthdays. An extra service "Just-in-time"
asks subscribers to list anniversaries, special events and important
dates - such as doctor's appointments or car's next oil change.
Customers can contact the service by telephone, email or via the web,
and 50 advisers and researchers help to solve their problems and
answer their queries."
"Queries range from sending flowers, making reservations and general
requests for information, with customers obliged to use their First
USA credit card if an inquiry results in a purchase. The bank has a
tie-in with a number of relevant vendors, for which they receive a
commission on sales from customers they have recommended. "At your
request" has developed as a search engine built around the needs of
its customers, using the Internet to obtain the necessary information.
The service has been successful for First USA as a means of obtaining
information about their customers, building trust and maintaining
ownership of their credit cards."
========
If you need additional clarification, please don't hesitate to ask
*before* rating this answer and I will be happy to help if I can!
umiat-ga
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