Customer Relationship Management
A company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on specific customer groups.
5 Benefits to the Small Firm
Lower Acquisition Costs
Acquisition costs for new customers are high. Retaining is cheaper.
Higher Spending
Long-time customers spend more money than new customers do.
Referrals
Happy customers refer their friends and colleagues (Word of mouth).
Lower Processing Costs
Order-processing costs are lower for established customers.
Price Premium
Current customers are willing to pay more for trusted products.
The Rising Returns of Customer Satisfaction
Entrepreneurs must aim to move customers from Indifference to Affection.
Managing Satisfaction
- Personal attention
- Doing business on a first-name basis
- Keeping in touch & finding ways to help
- Customizing service to customer preferences
- Addressing problems promptly
Dealing with Dissatisfaction
How consumers react when things go wrong:
Public Actions
Example: Suing a contractor for incomplete work.
Example: Reporting to consumer tribunal.
Private Actions
Example: Speaking to the manager.
Example: Quietly moving to a rival.
Example: Negative word-of-mouth.
Consumers as Decision Makers
Understanding the 4 stages of the customer journey.
Positive Outcomes
- "It works great!" (Positive Eval)
- "I found another use for..." (Usage)
- Repurchase loop initiated
Cognitive Dissonance
Anxiety immediately following a purchase.
"Did I buy the right one? Should I have waited?"
Negative Outcomes
- "It doesn't work well" (Negative Eval)
- Consumer complaints
- No Repurchase / Product Disposal
Customer Profiles & Influences
A collection of information including demographics, attitudes, and behaviors.
Data Collection Categories
Psychological Influences
Sociological Influences
- Personal Attention: Send personalized thank-you notes with jewelry purchases.
- First-name basis: Ensure customer service agents use names and reference past purchases.
- Loyalty Programs: Create VIP tiers (Apostles) with exclusive early access to new pearl collections.
- Address Problems Promptly: Easy returns and fast repairs to prevent customers moving to the "Hostility Zone".
- Descriptive Data: Anniversaries, birthdays, spouse names (crucial for jewelry gifting).
- Transactions: Past purchase history, average spend, preferred pearl types.
- Customer Contacts: Records of all emails, phone calls, and live chat interactions.
- Responses: How they react to email discounts vs. new collection announcements.
- Automated Email Triggers: "Happy Anniversary" reminders with a curated gift guide.
- Web-based Self Service: A portal where customers can check order status or view digital appraisal certificates.
- Post-Purchase Surveys: Automated emails 2 weeks after delivery to manage "Cognitive Dissonance".
🇲🇾 Real Case Application: Malaysian SME
Applying textbook CRM strategies to a real-world, rapidly growing Malaysian tech-F&B startup.
1. Technology Support for CRM
The Concept: Using technology to gather data and manage complex customer interactions.
ZUS Application: Their primary CRM tool is the ZUS App. It consolidates ordering, payment (ZUS Balance), and loyalty points. This seamless web-based self-service eliminates physical queueing and captures every single customer interaction in a unified database.
2. Building Customer Profiles
The Concept: Collecting transactions, demographic data, and preferences to understand the customer.
ZUS Application: The app builds a highly accurate profile. It knows your Transactions (favorite drink: Spanish Latte), your Preferences (less sweet, oat milk), and uses this to send personalized push notifications (Response to Stimuli) right when you usually crave coffee.
3. Post-Purchase Evaluation
The Concept: Managing dissatisfaction privately before it becomes a public complaint.
ZUS Application: After picking up an order, the app prompts for an immediate rating. If a customer gives 1-3 stars (Negative Eval), the customer service team is alerted to address the problem privately and promptly, preventing the customer from turning into a public "Terrorist".
4. Sociological Influences
The Concept: Leveraging reference groups, culture, and opinion leaders.
ZUS Application: They integrated a "Gift a Coffee" feature and strong referral systems. This taps directly into the Malaysian culture of sharing food and beverages with friends/colleagues (Reference Groups), turning existing customers into Opinion Leaders.
Group Task
Please find one SME. Choose one CRM Strategy that the SME does and has implemented, then elaborate it.
Activity 1: General
Collaborative task: Analyzing local CRM strategies.
Student Workspace
Group Assignment: SME Analysis
Identify and analyze the Customer Relationship Management strategies of a local SME.
Identify Their CRM Strategies:
SME Example Guide
Tech & Profiling
They launched their own custom app (technology support) to replace paper stamp cards. This allowed them to build distinct Customer Profiles tracking exact purchase history and favorite burgers, allowing them to send highly targeted birthday promos.
Handling Dissatisfaction
They are famous for actively managing complaints on Twitter/X. When a customer takes a "Public Action" (complaining online), mBL responds immediately with humor and an offer to replace the meal, often converting a "Terrorist" directly back into an "Apostle".
Group Task
Practical application: Analyzing local SME strategies.