MARKETING DOMAIN TASK 1 - CUSTOMER RELATIONSHIP MANAGEMENT

DAY 1
Theoretical Analysis: -
1. What is CRM?
CRM stands for Customer Relationship Management. It refers to a system or approach used by
businesses to manage and analyze customer interactions and data throughout the customer
lifecycle, with the aim of improving business relationships with customers, increasing customer
satisfaction, and maximizing profitability. CRM systems typically include features such as sales
automation, marketing automation, customer service and support, and analytics. With the help
of CRM, businesses can track customer interactions and behavior, manage customer
information and data, and gain insights into customer preferences and needs. This information
can then be used to tailor marketing and sales efforts, provide better customer support, and
make more informed business decisions. CRM can be implemented through software or cloud-
based platforms and is widely used by businesses of all sizes and industries to manage their
customer relationships and drive growth. Ultimately, CRM helps businesses to better
understand their customers, build stronger relationships with them, and ultimately increase
customer loyalty and revenue.

2. Significance of customer life cycle - customer acquisition, customer retention,

customer development.
Customer Acquisition - the first stage, to bring in new customers, we engage. Marketing and
advertising campaigns, to raise brand awareness and attract new names.
Customer Retention - the second phase, where keeping existing customers happy is the aim. To
maintain engagement and customer satisfaction, Loyalty programs and personalized
interactions are the reaction.
Customer Development - the final stage, this is where existing customers are engaged. To upsell
and cross-sell, and build brand advocacy, by creating products and services that satisfy their
needs with accuracy.
Throughout the life cycle, customer acquisition is key to attracting potential customers and
converting them to loyal devotees. By targeting the right audience and providing a unique value
proposition, Businesses can secure their growth and make a lasting impression. In summary, the
significance of the customer life cycle is clear, it helps businesses understand customer behavior
and stay sincere. By focusing on acquisition, retention, and development, Businesses can build a
loyal following and create a strong brand.
3. What is Customer Lifetime Value and what is its general trend in the customer
life cycle?
Customer Lifetime Value (CLV) is a metric that represents the total amount of revenue a
business can expect from a single customer throughout their relationship over time. The general
trend in the customer life cycle for CLV varies depending on the industry and business. However,
in most cases, the CLV tends to increase over time as customers become more loyal to the
brand and continue to purchase more frequently and spend more on each purchase. The CLV
can also be influenced by factors such as the quality of customer service, the level of
personalization offered, and the effectiveness of targeted marketing campaigns. Customer
Lifetime Value (CLV) is a metric that helps businesses measure the total value a customer brings
to their business over the course of their relationship. It considers the total revenue generated
by a customer as well as the costs incurred to acquire and retain that customer. The formula for
calculating CLV is as follows:
CLV= (Average Order Value) x (Number of Repeat Purchases) x (Average Customer Lifespan)
By understanding the CLV of their customers, businesses can make informed decisions about
their marketing, pricing, and customer service activities to maximize the value of each customer
and improve their overall profitability.

4. What is Net Promoter Score?

Net Promoter Score (NPS) is a metric used to measure customer loyalty and satisfaction. It is
based on the question "How likely are you to recommend our product/service to a friend or
colleague?" Customers are typically asked to rate their likelihood on a scale of 0-10. Those who
answer with a 9 or 10 are considered "promoters" who are highly likely to recommend the
product or service to others, while those who answer with a 0-6 are considered "detractors"
who are unlikely to recommend. The Net Promoter Score is then calculated by subtracting the
percentage of detractors from the percentage of promoters. This score can range from -100 to
100, with a higher score indicating a greater level of customer satisfaction and loyalty. The Net
Promoter Score is used by many companies as a key performance indicator for customer
experience and loyalty, helping them identify areas for improvement and measure the success
of their customer retention strategies.

5. What research questions can be asked to find NPS?

Here are some potential research questions that could help identify Net Promoter Score (NPS):
1) How likely are you to recommend our company/ product/service on a scale of 0-10?
2) Why did you give that rating to our company/product/ service?
 3) Are there any specific features that you particularly liked/disliked about our
product/service?
4) Have you recommended our company/product/ service to anyone else? If yes, why? If
not, why not?
5) On a scale of 0-10, how likely are you to continue using our product/service in the
future?
6) How often do you interact with our company/ product/service?
7) Are there any areas where you think we can improve our product/service? If yes, please
share your suggestions.
8) How does our product/service compare to similar products/services in the market?
9) Have you had any negative experiences with our company/product/service? If yes,
please elaborate.
10) Do you believe our company/product/service is reliable and trustworthy? Why or why
not?

6. Who are promoters, detractors and passives?

Promoters, detractors, and passives are terms used in customer satisfaction surveys to
categorize customers based on their level of satisfaction with the product or service.
1. Promoters: These are customers who are extremely satisfied with the product or service and
are likely to recommend it to others. They are enthusiastic about their experience and have a
strong affinity for the brand. Promoters typically rate the productor service with a 9 or 10 on a
10 -point scale.
2. Detractors: These are customers who have had a negative experience with the product or
service and are likely to discourage others from using it. They are unhappy with the brand and
may leave negative reviews or feedback. Detractors typically rate the product or service with a
score of 6 or below on a 10-point scale.
3. Passives: These are customers who are neither strongly satisfied nor dissatisfied with the
product or service. They may continue to use the product or service but are not likely to
recommend it to others. Passives typically rate the product or service with a score of 7 or 8 on a
10-point scale.
Understanding the distribution of these groups through Net Promoter Score (NPS) surveys allow
companies to focus their efforts on improving customer satisfaction by minimizing detractors
and increasing promoters.