Customer Relationship

Management (CRM)
 is a process of managing an organization’s
interactions with current and future customers.

 The rationale for CRM is the recognition that

companies can sustain long-term profitability by
attracting and maintaining their most valuable
customers.
How can these customers be recognized?
1. Customer database information
Marketing companies create and maintain customer
databases that record and keep the following
information progresses to include customers’ buying
history and behavior.
2. Customer Shopping History
It can be used to accurately identify the type of
merchandise frequently purchased, the amount
spent, the preferred days of shopping, etc.
 Customer Lifetime Value (CLV)
• It is the forecasted sales or profits that a
company can derive from the entire span of
its future relationship with a particular
customer.
 Implications of CLV
1. It considers a longer-term perspective of a
company’s relationship with customers in contrast
to a short-term view of “take the customer’s money
and run”.
2. It calculates and compares costs of acquiring new
customers and keeping the old ones.
3. It highlights the importance of market segmentation,
with the recognition that some customer groups are more
profitable than others.
 Formula:
CLV = (PV) (RP) (RT)
Where:
PV is the average peso value of a sale to a
paticular customer or customer group
RP is the repeat purchase in a year
RT is the retention time in months or years
CLV is the customer lifetime value
 Example 1:
An athlete who spends P 2,000 for every visit to a spa
and goes to the spa twice a month for an expected
time period of five years would have a CLV of what?
 Example 2:
A freelance host buys beauty product every
month. She purchases facial cleanser, toner,
serum as well as day and night cream. The total
purchase is amounting to P 5,000 for an
expected time period of two (2) years.