Strategic Brand Management Exeter MBA and MSc CRM and its impact on Service Sector Brands Customer Relationship Management CRM deals with learning about the needs and behaviour of consumers in order to develop stronger relationships with them CRM involves the use of technology to enable organizations to continue attracting new and profitable consumers whilst forming ever tighter bonds with existing ones 1

CRM tools Contact marketing Direct marketing Loyalty schemes Telesales and telemarketing Internet marketing and other techniques that treat the consumer as an individual Strategic Brand Management Consumer Focussed / Customer Aware Brand Consumers Product / Service Customers 2

CRM by industry and function CONSUMER SERVICE B to B Service and Consumer industries Service industry Information provision Regular contact Consumers need a relationship Banks, insurance services Consumer industries Limited information provision Irregular contact Consumers choose the depth of relationship FMCG, consumer industries 3

CRM and B to B Technology aided by the Internet can shorten the supply chain and save costs CRM forces cross-functional thinking cultural change organizational challenge Re-evaluation evaluation of distribution channels Why do you need a sales force? Why go into a bank? What alternative channels exist? CRM impacts business process Application To Consumer To Business (B to B) Industry CONSUMER Marketing Strategy Cost savings Supply chain SERVICE Marketing Strategy Cost Savings Supply chain 4

The impact of CRM on marketing departments The marketing function expands throughout the organization The brand becomes integrated into the company Back office / supply chain transparency Marketing as a generic function? External Brand Experience Name Logo Advertising Brand Identity Products Services The Brand Iceberg Internal Brand Experience Brand Values Internal communications Business processes Investor relations Supplier relations HR policies and processes Technology Interbrand Group 5

The impact of CRM on consumer segmentation Alternative approaches to the consumer Methods of differentiation Alternative aggregations of consumer groups Tesco 5000 need segments Evolution of communities approach to segmentation P & G home made simple The impact of CRM on traditional communications Traditional communications Brand building through product / services allied to advertising Contemporary communications Integrated brand building (brand as a network) Brand drivers beyond advertising Viral and on-line communications CRM accelerated the decline of traditional communications What is the role of the advertising agency? 6

The impact of CRM on traditional strategy Corporate Marketing Technology B to B..And the Internet Strategy must be integrated and clearly defined The Strategy Dilemma Change the Corporation Create internal start-up 7

Tesco Legendary CRM / loyalty strategy 2001 6 million loyal shoppers 20% coupon redemption (0.5% industry average) CRM allows diversification (50% less cost in acquiring financial services customers) ICFAI Center for Management Research Tesco case study The Banking industry New technology reduced the transaction cost and the distribution structure Enabled detailed cost comparisons Internal start-up versus the corporate brand? Capital One Understand customer s s risk profile to generate personal profile No silos within the company Profitability driven by understanding consumer characteristics to develop products Culture of involvement 8

The impact of CRM Challenged the traditional role of value in marketing value as a qualifier? Elevated the role of trust in marketing Internally as a necessity in B to B process re-evaluation evaluation Externally as a source of consumer competitive advantage brand diversification New consumer segments and communities strategy creativity (ability to envisage the market) The impact of CRM Forced strategy integration marketing, technology, corporate Encouraged strategy creativity Deepened the consumer relationship Encouraged longer-term thinking within branding and marketing CRM is a long-term commitment Changed marketing programmes and activities Accelerating the decline of traditional marketing 9