Managing Customer Relationships: A Strategic Framework / Edition 1

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In today's competitive marketplace, managing customer relationships or customer relationship management (CRM) is critical to a company's profitability and long-term success. To become more customer-focused, skilled managers, IT professionals, and marketing executives must understand how to build profitable relationships with each customer and how to make everyday managerial decisions that increase the value of a company by increasing the value of the customer base. The goal is to build long-term relationships with customers and generate increased customer loyalty and higher margins. In Managing Customer Relationships, Don Peppers and Martha Rogers, credited with founding the customer-relationship revolution in 1993 when they coined the term "one-to-one marketing," provide the definitive overview of what it takes to keep customers coming back.

Presenting a comprehensive framework for CRM, Managing Customer Relationships provides CEOs, CFOs, CIOs, CMOs, privacy officers, human resources managers, marketing executives, sales teams, distribution managers, professors, and students with a logical overview of the background, the methodology, and the particulars of managing customer relationships for competitive advantage. Peppers and Rogers incorporate many of the principles of individualized customer relationships that they are best known for, including a complete overview of the background and history of the subject, relationship theory, IDIC (Identify-Differentiate-Interact-Customize) methodology, metrics, data management, customer management, company organization, channel issues, and the "store of the future." One of the first books designed to develop an understanding of the pedagogy of managing customer relationships, with an emphasis on customer strategies and building customer value. The techniques in Managing Customer Relationships can help any company sharpen its competitive advantage.

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Product Details

  • ISBN-13: 9780471485902
  • Publisher: Wiley, John & Sons, Incorporated
  • Publication date: 3/5/2004
  • Edition description: Older Edition
  • Edition number: 1
  • Pages: 528
  • Product dimensions: 7.34 (w) x 10.08 (h) x 1.69 (d)

Meet the Author

DON PEPPERS is a Founding Partner at Peppers & RogersGroup. He is a former CEO of a top-20 direct marketing agency. Heis a globally respected thought leader, futurist, and consultant.He holds a degree in astronautical engineering from the U.S. AirForce Academy and a master's in public affairs from PrincetonUniversity's Woodrow Wilson School. His popular blog, "PeppersUnplugged," can be found at

MARTHA ROGERS is a Founding Partner at Peppers &Rogers Group and is in demand for speaking and thought leadershipon six continents. She is also an adjunct professor at the FuquaSchool of Business at Duke University. She earned her PhD atUniversity of Tennessee as a Bickel Fellow, and has led multi-year,multimillion-dollar research programs.

PEPPERS and ROGERS have published eight best-sellingbooks and are "always working on the next one." Their first book,The One to One Future, was named "Book of the Year" by TomPeters and "one of the two or three most important business booksever written" by George Gendren, then editor of Inc. Their secondbook, Enterprise One to One, was given a five-star rating bythe Wall Street Journal. The books appear in nineteenlanguages. They have also published in Harvard Business Review andother academic publications.

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Table of Contents

Ch. 1 Evolution of relationships with customers 3
Roots of customer relationship management 5
The view from here 11
Get, keep, and grow customers in the twenty-first century 17
What is a relationship? 19
The technology revolution and the customer revolution 23
Ch. 2 The thinking behind customer relationships 35
What characterizes a relationship? 35
Thinking about relationship theory 38
CRM : the customer's view 51
The nature of loyalty 56
Ch. 3 Customer relationships : basic building blocks of IDIC and trust 65
Trust and relationships happen in Tandem 66
IDIC : four implementation tasks for creating and managing customer relationships 68
How does trust characterize a learning relationship? 71
The trust equation : generating customer trust 72
Becoming the customer's trusted agent 78
Relationships require information, but information comes only with trust 81
Ch. 4 Identifying customers 87
Individual information requires customer recognition 88
What does "identify" mean? 93
The internet's role in customer identification : betting on Amazon 97
Customer data revolution 98
Role of smart markets in managing relationships with customers 103
Ch. 5 Differentiating customers : some customers are worth more than others 113
Customer value is a future-oriented variable 114
Different customers have different values 120
Convergys : a case study in using proxy variables to rank customers by their value 127
Ch. 6 Differentiating customers by their needs 137
Definitions 138
Differentiating customers by need : an illustration 141
Understanding needs 145
Using needs differentiation to build customer value 147
Differentiating customers by their needs : a practical approach 148
Ch. 7 Interacting with customers : customer collaboration strategy 161
Dialogue requirements 162
Implicit and explicit bargains 164
Succeeding at interaction strategy means integrating across touchpoints 169
Integrated marketing communications and CRM : friends or foes? 172
Customer interaction and dialogue management 179
Complaining customer as collaborators 185
Ch. 8 Using the tools of interactivity to build learning relationships 191
Customer-based software sampler 192
Using e-mail to interact with customers 196
Using e-mail to build customer value 196
Evolution of the customer interaction center in the context of IDIC 203
Wireless rules : how new mobile technologies will transform CRM 208
Ch. 9 Privacy and customer feedback 213
Permission marketing 217
Privacy issues for the information age 223
Individual privacy and data protection 228
Privacy in Europe is a different world 232
Privacy pledges build enterprise trust 235
Submitting data online 238
Privacy on the net 241
Ch. 10 Using mass customization to build learning relationships 255
How can customization be profitable? 256
You're only as agile as your customers think 263
Technology accelerates mass customization 277
Customization of standardized products and services 279
Value streams 282
Who will write the new business rules for personalization? 287
Ch. 11 Measuring the success of customer-based initiatives 299
Brand equity versus customer equity 300
Nature of customer loyalty : attitude or behavior? 301
Economics of loyalty 302
Customer profitability metrics 307
Longitudinal metrics and short-term gain 309
Measuring customer satisfaction 315
Managing customer relationships : metrics case study 321
Ch. 12 Customer analytics and the customer-strategy enterprise 341
Optimizing customer relationships with advanced analytics 350
Ch. 13 Organizing and managing the profitable customer-strategy enterprise 359
Capabilities for forging customer relationships 363
Relationship governance 370
How to get there from here : transitions to customer management 375
The manager of portfolios of customers 380
Stages of change to become a customer-strategy enterprise 381
Transition across the enterprise 386
Managing employees in the customer-strategy enterprise 397
Overcoming employee resistance 397
Loyalty-based management 400
Momentum building in the customer-based enterprise 407
Ch. 14 Delivery channel issues of the enterprise focused on building customer value 411
Dealing with channel pain 412
Distribution system management 417
General Motors' Vauxhall division : managing the customer experience across channels and touchpoints 420
Demand chain and distribution 428
Supply chain management and managing customer relationships 430
Ch. 15 Store of the future and the evolution of retailing 451
Consumer direct channel 454
Using operational excellence as a competitive advantage : Tesco 464
The online store and the role of the brand in online shopping 472
Final mile to consumers 479
Logistics business models for success 483
App Where do we go from here? 487
Index 498
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  • Anonymous

    Posted January 12, 2005

    Taking One-to-One marketing to the CEO's agenda

    Having last summer finalised an e-business thesis on Online Personalization, I must say that this book is an impressive source on the strategic level for what is synonymously called CRM, One-to-One marketing, relationship marketing, etc. What I like about Peppers & Rogers is that they don't pretend to be the only ones to have seen this shift in customer-focused organizations (although they were first-movers in US by coining the term One-to-One in 1993). Peppers & Rogers accept readily that many other people have interesting perspectives to add. Thus, this book includes many contributions from marketing wizards like Philip Kotler, Seth Godin, Bruce Kasanoff, and Patricia Seybold. The book is the sixth from the authors. If you have read some of the previous publications, you'll already be familiar with their core concepts like the IDIC-model (Identify-Differentiate-Interact-Customize), as well as Learning Relationships and customer Lifetime Value. I believe that Peppers & Rogers' most important contribution is to change a company's focus from customer acquisition to customer retention. That is: Stop spending all you money getting new customers and start spending more on keeping and growing existing customers. This is where the learning relationships come in. The basic idea of Managing Customer Relationships, the authors concisely describe in plain English: The Learning Relationships work like this: If you're my customer and I get you to talk to me, and I remember what you tell me, then I get smarter and smarter about you. I know something about you my competitors don't know. So I can do things for you my competitors can't do, because they don't know you as well as I do. Before long, you can get something from me you can't get anywhere else, for any price. At the very least, you'd have to start all over somewhere else, but starting over is more costly than staying with me. Being a Dane, I'm proud to see the reference made on page 172 that the relationship theory can be traced back to the Scandinavian School of Relationships Management (e.g. Gronroos and Gummeson). Back in the 1980's, both were required reading in Scandinavian business schools. They often researched service firms and B2B-networks and based on this knowledge, they emphasised the contents and types of the business relationships and the required strategies to make these relationships work. It wasn't until the 1990's that CRM-initiatives took off in the United States - and usually they have been very technology-driven. Today, we all accept that you need both the relationship mindset and the technology-enabler. So the two approaches may ultimately achieve the same goals. Peter Leerskov, MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

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  • Anonymous

    Posted August 5, 2004

    Highly Recommended!

    This very extensive text on customer relationship management leaves nothing unsaid or unexplained. Authors and editors Don Peppers and Martha Rogers tackle the subject with admirable organization, clarity and depth. They define every important term and do not lose the reader in marketing jargon ¿ a rare virtue in a book about marketing. The text, including contributions from other well-known experts in the field, propounds a well-developed theory of customer relationship management (CRM) and sets out numerous examples to illustrate, explain and clarify the theory. Useful as a handbook, textbook or reference manual, the book covers ¿ among many other core subjects ¿ customer identification and differentiation, customer feedback, an analysis of retailing and basic tools for CRM. We highly recommend this book to service-oriented managers and executives. To form profitable relationships with your customers, first get friendly with Peppers and Rogers.

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