CUSTOMER RELATIONSHIP MANAGEMENT

FINAL EXAM…2B ACADEMIC YEAR 2020-2021.

Major/Class : MGT1123E, B02E
Course : Customer Relationship Management
Course code : MGT1123E No. of Credit:3...
Date : 20/07/2021
Time limit : Exam method : Writting ..
Exam code (If any) : …Open essay .
Name : Lý Hồng Ngọc
Student code : 185040602

CRM FINAL TEST

QUESTION 1. (4 Mark(s) )
CRM implementation could be milestone for building new strategic competences/ digital
transformation process of Companies. Can you identify the key issues/ challenges for A
Company X (a real example of your choice) during this process CRM adoption? Do you
think that a small Business could have benefits from CRM program?
Briefly analyze one case study / companies of choice that use CRM to build a good and
profitable relationship with Customers. (i.e: Hints for answer with analysis from 1 case
study: How CRM act as s strategic marketing tool? Explain the changing landscape of
Marketing in 2020s that lead to the Rise of Relationship Marketing. Please discuss with
examples.)

ANSWER:
Example:
MASHKIN GROUP
Mashkin Group Inc. (Mashkin), a wholly owned subsidiary of Amir Inc., a British financial
conglomerate, is a medium-size, asset-management group based in the US.
Mashkin consists of three primary divisions: a mutual fund company with $10 billion in
assets; a separate, but closely affiliated asset management company with $15 billion in
assets; and a financial services company.
Since the early 1990s, these three enterprises have shared the same client database and
other software programs.

Identify problems in CRM adoption of MASHKIN GROUP:

1/ There is no comprehensive CRM system at first.
2/ There is no cross function and poor technology for CRM
3/ Poor training users
4/ The cost of the new CRM system implementation turned out to be substantially greater
than was budgeted
5/ These clients had lengthy files that were made cumbersome and difficult to navigate as
a result of the data poor quality
6/ Integrated CRM application specific to the financial industry was implemented, financial
advisors and salespeople were not utilizing it

In my opinion small businesses have many benefits from using a CRM program such as:
 Help employees know what they need to focus on doing on a daily basis
 Personalize every interaction with customers
 Make sales decisions more efficiently
 Seize great opportunities

Example: APPLE

One of the factors that makes Apple successful today is building a marketing strategy that
is very different from the competition, from advertising campaigns in the mass media to
reating good relationships with customers. customer. In particular, creating a good
elationship with customers is one of the decisive factors for the success of this marketing
strategy.
Sleve Jobs - the great CEO of Apple - has often responded to emails, letters, and messages
from small customers:
 Build relationships with the company's customers.
 Customers not only feel satisfied when their comments and questions are received
and answered, but also feel the company's concern for each customer.
 Collect customer comments, comments and feedback.
In order to create comfort for customers when buying and trying the company's products,
Apple has established its own store system - Apple Store serves customers in the best way
from the service style of the staff. to create a friendly environment to try the product. This
is an important factor in creating a huge loyal customer base of Apple. Sample products
must be equipped with the latest operating systems and applications so that customers
can freely experience and explore the functions.
According to Apple's concept of "owning experience" for customers, Apple Store
employees are always ready to help customers as soon as they have problems with the
application or any information about the product. The store staff always make customers
psychologically comfortable to really experience the product in their own way and also
show respect for the customer.
To ensure that the customer's benefits are optimal, the employees do not direct customers
to follow technology but help customers realize the strengths of the product. From there,
direct customers to the potential benefits that the product brings and help customers
realize the difference of the product compared to other products.

QUESTION 2. (3 Mark(s) )
Briefly explain the benefits of Loyalty Programs: Are They for Customer Retention or
Acquisition? List the key activities that companies use a Loyalty program to maintain a
good relationship with the loyal customers. Discuss with examples.

ANSWER:
Loyalty programs are businesses' efforts to build "bridges" with customers so that they
continue to use products and services again and again. To do that, the loyalty program
needs to focus on building a "long-term strategy" to create interactions and create long-
term relationships with customers, not to increase sales in the short term.

Benefits of the loyalty program:

• Loyalty program for true emotional connection
 Loyal customers are willing to spend to buy products and services, even though
there are many other choices. They will return to buy 32% more. In addition, they
spend 46% more than other customers (according to Gallup research).
 Loyalty program always aims to personalize customer experience, bringing core
values to each member. When customers become loyal customers, customers will
receive exclusive privileges based on their membership tier. This helps them feel
that they are a special and important customer to the business.
 Through the loyalty program, they will become the first customers to experience
new products. Members will be the first to have information about promotions, or
enjoy extremely attractive offers only for members.
• A powerful tool to boost sales
  It is thanks to the emotional connection and customer satisfaction that the loyalty
program can boost their return rate up to 54% (annexcloud.com). Loyal customers
will stay longer, buying rates about 67% higher than a new customer. Therefore,
they bring a significant source of revenue for businesses that implement good and
effective loyalty policies.
• New strategies to promote the brand
 With loyalty policy, businesses increase customer base by encouraging members to
refer friends and relatives to know and join the program. Members will receive
incentives when successfully referring new members. From there, the business
transmits its brand value to others.
 Besides, giving incentives to customers when they write product reviews, sending
feedbacks is also an effective way to build trust with other customers. Businesses
can also encourage customers to share their impressions of the times and products
they are most satisfied with, most happy when sticking with the loyalty program.

Strategies to build a loyalty program:

• Accumulate points, reduce prices, increase coupons/vouchers
 This is probably the most popular, simplest but most effective idea for the Food
And Beverage segment in building after-service customer relationships. Customers
receive bonus points after making a purchase or receive a discount voucher for the
next purchase. At the same time, customers can track their reward points via card,
online account or mobile application. It is because of this seamless experience that
the strategy of accumulating points is very popular on e-commerce platforms such
as Shopee, Lazada, Sendo, Highland cafe chain, The Coffee House,…

• Cashback shopping program

 Cashback shopping program (also known as cashback) is a form of refunding a
certain amount of money to customers when they shop and pay for products.
Although very popular in the world, but this program has only appeared and
popped up in Vietnam in the past few years. So why do customers get money after
shopping? That's because retailers as well as brands often offer discounted
advertising commissions for these apps. Therefore, every time someone buys a
product, the application will receive money. The app then transfers a portion of
that commission to the customer. Currently, cashback has the following forms:
  Credit card refund: Some online shopping websites often connect with
banks to refund customers when paying for products by card. In addition,
the bank will now also issue cashback credit cards to customers when
shopping. For example, Techcombank applies cashback program for
Techcombank F@stAccess, Techcombank Visa Debit and Vietnam Airlines
Techcombank Visa Debit cards; HSBC with HSBC Visa Cashback; VIB

Cashback.

 Refund via e-wallet: These are wallets that customers can use to pay when
buying products that support wallets. To encourage users to use the wallet,
local e-wallet applications such as Momo, Airpay, and Zalopay always have
very attractive refund programs when customers buy goods on Shopee,
Lazada or pay sums. other (telephone, electricity, water,...)

• Tiered Loyalty Program

 With this program, businesses will set up separate regulations for each member
level. In it, each rank will include special offers, features, and gifts. So the client has
to perform "missions" to reach those ranks. A typical example of this form is the
Beauty Squad program of cosmetics company E.L.F. Based on the number of bonus
points received by customers, the brand has built points and divided them into 3
groups – extra, epic and icon. Customers will reach the icon rank when they are
rewarded with 400+ points in 1 year.
QUESTION 3. (3 Mark(s) )
What is the link between customer lifetime value and the profitability of an organization?
The four key areas of concern of CRM are: Customer selection, Customer acquisition,
Customer retention and Customer extension: briefly explain the core components of CRM
with concrete example in real life? (Fashion brand Zara, Amazon, Starbucks, Saigon Tourist,
Vietnam Airlines, Pn), or other case study of your choice ...)

ANSWER:
Customer lifetime value is important because, the higher the number, the greater the
profits. You’ll always have to spend money to acquire new customers and to retain existing
ones, but the former costs five times as much.
When you know your customer lifetime value, you can improve it. Work on retaining your
existing customers through email marketing, SMS marketing, social media marketing, and
more. You still want new customers, but don’t forget about the old ones.
Effective management of your customers relationships, which leads to increased
profitability—that’s perhaps the most obvious advantage of Customer Lifetime Value.

Another way of saying:

The connection between client lifetime esteem and the benefit of an organization: In
showcasing, client lifetime esteem (CLV or frequently CLTV), lifetime client esteem (LCV),
or lifetime esteem (LTV) could be a prognostication of the net benefit contributed to the
complete future relationship with a client. The expectation show can have changing levels
of modernity and exactness, extending from an unrefined heuristic to the utilize of
complex predictive analytics strategies. Finding the culminate equation for CLV isn't as
simple because it appears, since it can be calculated in a large number of ways.
Most concisely, lifetime esteem is found by duplicating a customer’s buy recurrence with
normal bushel volume, at that point isolating it by their maintenance taken a toll.
So how do loyalty programs factor into all of this?
As a study from Motista shows, customers with an emotional connection to brands have a
306% higher lifetime value. This is most likely due to the fact that a comprehensive
rewards program can simultaneously enhance all three elements of the lifetime value
equation
The four key areas of concern of CRM are: Customer selection, Customer acquisition,
Customer retention and Customer extension:

 Customer selection:
 Who do we target?
 What is their value?
 What is their lifecycle?
 Where do we reach them?
 Customer acquisition:
 Target the right segments
 Minimize acquisition costs
 Optimize service quality
 Use the right channels
 Customer retention:
 Understand individual needs
 Relevant offers for continued usage of online services
 Maximize service quality
 Use the right channels
 Customer extension:
 'Sense and Respond'
 Cross-selling and up-selling –
 Optimize service quality
 Use the right channels
Example: Highland coffee
 Customer selection:
 The customers that Highlands Coffee has been serving are middle-class
consumers, office workers, and young people. Drinking coffee here also makes
customers feel that they belong to the upper classes. Or customers from the
upper classes, who can't drink coffee at an ordinary shop without a brand, they
have to drink at Highlands Coffee - where the brand is reputable, partly to affirm
their class.
 Highlands Coffee has always shaped its brand as a high-class coffee brand, so the
distribution strategy and location of the shop are always carefully considered by
Highlands Coffee to bring comfort and convenience. for customers in any
restaurant. The first impression when coming to Highlands Coffee is another open
and semi-closed space. This is in line with their business philosophy: Combining
modernity with traditional Vietnamese charm and values.
 Customer acquisition:
 Highlands Coffee gradually improves the quality to reach perfection.
 Also apply promotions for the next purchase to retain customers for
example:
 Second glass for 5,000 VND

 Buy three get one free

 60K discount for orders from 120k at Highlands Coffee shops at

Baemin platform
 Customer extension:
 Highland's marketing strategy: "Bình dân hóa"
 Change menu, change brand position
 Besides, using channels intelligently and appropriately to timely reach target
customers.
 Customer retention:
 Customer care: Available on social network Facebook, so please share at:
https://www.facebook.com/highlandscoffeevietnam / or you can email us at:
[email protected].
 Highlands' food group is divided into 2 main groups: Bread & cake (sweet),
Highlands chooses bread as the leading product because of the popularity and
convenience of bread.