MKT 489 Exam #1 Summaries and exam elaborations
1. CRM (Customer Relationship Management): is an information industry term for methodologies, software and
usually internet capabilities that help an enterprise manage customer relationships in an organized way
2. Types of CRM: strategic, operational, analytical
3. Strategic CRM: is a core customer-centric business strategy that aims at winning and keeping profitable customers.
4. Operational CRM: focuses on the automation of customer-facing processes such as selling, marketing and customer
service.
5. Analytical CRM: is the process through which organizations transform cus- tomer-related data into actionable
insight for either strategic or tactical purposes.
6. What is CRM?: CRM is a term for methodologies, software, and Internet capa- bilities that help manage customer
relationships in an organized way. It includes managing interactions like prospecting, sales, and service, improving
company/cus- tomer relations by providing insights into customer interactions.
7. What is the primary goal of CRM?: To improve long-term growth and profitability through better understanding of
customer behavior.
8. What are the three types of CRM?: Strategic CRM: Aims to win, develop, and keep profitable customers.
Operational CRM: Integrates and automates cus-
tomer-facing processes like sales and service. Analytical CRM: Uses data to gener- ate actionable insights for strategic or
operational CRM.
9. What is strategic CRM focused on?: Developing a customer-centric culture that enhances customer value,
retention, and engagement by delivering superior customer experiences.
10.What are the main applications related to operationalizing CRM?: Market- ing automation , Sales force
automation , Service automation
11.What are the sources of analytical data for CRM?: Sales data (purchase history), financial data (payment
history), marketing data (campaign response), service data, and external sources such as geo-demographic and
lifestyle data.
12.How does analytical CRM benefit customers and companies?: It provides timely, customized solutions to
customers, enhancing satisfaction and loyalty, and helps companies with cross-selling, up-selling, retention, and
acquisition.
13.What is social CRM?: A tool used to capture and interpret customer data from social media platforms like
Facebook and Twitter to create a comprehensive view of the customer.
14.What are common misunderstandings about CRM?: That CRM is only about sales efficiency, database
marketing, loyalty schemes, or an IT issue.
15.What is the core definition of CRM?: CRM is a business strategy focused on creating and maintaining profitable
relationships with customers through high-quality customer data and enabled by information technology.
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, MKT 489 Exam #1 Summaries and exam elaborations
16.Who are the main constituencies in CRM?: Companies, customers, partners, CRM software houses, social media
players, vendors of CRM hardware, and man- agement consultants.
17.What are the four actions suggested by the IDIC model to build one-on-one relationships with customers?:
Identify customers and build a deep understand- ing. Differentiate customers based on value. Interact to understand
expectations. Customize offers and communications. Payne's 5-Process Model of CRM:
18.What are the five processes in Payne's CRM model?: Strategy development Value creation Multi-channel
integration Performance assessment Information man- agement Relationship Levels (Woodburn & McDonald):
19.What are the five hierarchical levels of relationships according to Wood- burn & McDonald?: Exploratory
Basic Cooperative interdependent Integrated
20.What are the three types of trust?: Benevolence (acting in the interest of the relationship), Honesty (reliability),
and Competence (ability to perform as expected).
21.What is commitment in a business relationship?: Commitment is when a partner believes the relationship is
important enough to warrant maximum effort to maintain it, ensuring its endurance indefinitely.
22.What are the core attributes of high-quality relationships?: Trust, commit- ment, and relationship satisfaction.
23.What are the stages of the customer journey?: Suspect Prospect First-time customer Repeat customer Majority
customer Loyal customer Advocate
24.What is Customer Lifetime Value (CLV)?: The present-day value of all net margins earned from a customer
relationship over time.
25.What are the four causes of profit margin growth over time?: Increased revenue from customers. Lower
cost-to-serve. Loyal customers may pay more. Value-generating referrals.
26.What is strategic switching by customers?: When customers switch from one supplier to another for a better deal.
27.How does CRM analytics support customer acquisition?: It helps make the right offer to the right prospect at
the right time by providing sound customer insight.
28.What are the stages of relationship change in Dwyer, Schurr & Oh's mod- el?: Awareness: Both parties notice
each other as potential exchange partners. Ex- ploration: Investigation and testing of each other's capabilities. Expansion:
Increased interdependence and more transactions. Commitment: Adaptations on both sides, characterized by mutual
understanding and trust.
29.What are the two major dimensions of relationship commitment?: Affective commitment (emotional, trust-
based) and calculative commitment (rational, eco- nomic-based).
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5
1. CRM (Customer Relationship Management): is an information industry term for methodologies, software and
usually internet capabilities that help an enterprise manage customer relationships in an organized way
2. Types of CRM: strategic, operational, analytical
3. Strategic CRM: is a core customer-centric business strategy that aims at winning and keeping profitable customers.
4. Operational CRM: focuses on the automation of customer-facing processes such as selling, marketing and customer
service.
5. Analytical CRM: is the process through which organizations transform cus- tomer-related data into actionable
insight for either strategic or tactical purposes.
6. What is CRM?: CRM is a term for methodologies, software, and Internet capa- bilities that help manage customer
relationships in an organized way. It includes managing interactions like prospecting, sales, and service, improving
company/cus- tomer relations by providing insights into customer interactions.
7. What is the primary goal of CRM?: To improve long-term growth and profitability through better understanding of
customer behavior.
8. What are the three types of CRM?: Strategic CRM: Aims to win, develop, and keep profitable customers.
Operational CRM: Integrates and automates cus-
tomer-facing processes like sales and service. Analytical CRM: Uses data to gener- ate actionable insights for strategic or
operational CRM.
9. What is strategic CRM focused on?: Developing a customer-centric culture that enhances customer value,
retention, and engagement by delivering superior customer experiences.
10.What are the main applications related to operationalizing CRM?: Market- ing automation , Sales force
automation , Service automation
11.What are the sources of analytical data for CRM?: Sales data (purchase history), financial data (payment
history), marketing data (campaign response), service data, and external sources such as geo-demographic and
lifestyle data.
12.How does analytical CRM benefit customers and companies?: It provides timely, customized solutions to
customers, enhancing satisfaction and loyalty, and helps companies with cross-selling, up-selling, retention, and
acquisition.
13.What is social CRM?: A tool used to capture and interpret customer data from social media platforms like
Facebook and Twitter to create a comprehensive view of the customer.
14.What are common misunderstandings about CRM?: That CRM is only about sales efficiency, database
marketing, loyalty schemes, or an IT issue.
15.What is the core definition of CRM?: CRM is a business strategy focused on creating and maintaining profitable
relationships with customers through high-quality customer data and enabled by information technology.
1/
5
, MKT 489 Exam #1 Summaries and exam elaborations
16.Who are the main constituencies in CRM?: Companies, customers, partners, CRM software houses, social media
players, vendors of CRM hardware, and man- agement consultants.
17.What are the four actions suggested by the IDIC model to build one-on-one relationships with customers?:
Identify customers and build a deep understand- ing. Differentiate customers based on value. Interact to understand
expectations. Customize offers and communications. Payne's 5-Process Model of CRM:
18.What are the five processes in Payne's CRM model?: Strategy development Value creation Multi-channel
integration Performance assessment Information man- agement Relationship Levels (Woodburn & McDonald):
19.What are the five hierarchical levels of relationships according to Wood- burn & McDonald?: Exploratory
Basic Cooperative interdependent Integrated
20.What are the three types of trust?: Benevolence (acting in the interest of the relationship), Honesty (reliability),
and Competence (ability to perform as expected).
21.What is commitment in a business relationship?: Commitment is when a partner believes the relationship is
important enough to warrant maximum effort to maintain it, ensuring its endurance indefinitely.
22.What are the core attributes of high-quality relationships?: Trust, commit- ment, and relationship satisfaction.
23.What are the stages of the customer journey?: Suspect Prospect First-time customer Repeat customer Majority
customer Loyal customer Advocate
24.What is Customer Lifetime Value (CLV)?: The present-day value of all net margins earned from a customer
relationship over time.
25.What are the four causes of profit margin growth over time?: Increased revenue from customers. Lower
cost-to-serve. Loyal customers may pay more. Value-generating referrals.
26.What is strategic switching by customers?: When customers switch from one supplier to another for a better deal.
27.How does CRM analytics support customer acquisition?: It helps make the right offer to the right prospect at
the right time by providing sound customer insight.
28.What are the stages of relationship change in Dwyer, Schurr & Oh's mod- el?: Awareness: Both parties notice
each other as potential exchange partners. Ex- ploration: Investigation and testing of each other's capabilities. Expansion:
Increased interdependence and more transactions. Commitment: Adaptations on both sides, characterized by mutual
understanding and trust.
29.What are the two major dimensions of relationship commitment?: Affective commitment (emotional, trust-
based) and calculative commitment (rational, eco- nomic-based).
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5
