MKTG 775: Managing the Value of Customer Relationships
As the concept of Customer Relationship Management (CRM) becomes common parlance for every marketing executive, it is useful to take a step back to better understand the various different behaviors that underlie the development of successful CRM systems.
As the concept of Customer Relationship Management (CRM) becomes common parlance for every marketing executive, it is useful to take a step back to better understand the various different behaviors that underlie the development of successful CRM systems. These behaviors include customer-level decisions, firm actions, and the delicate but complex interplay between the two. Accordingly, this course is comprised of three main modules. We start with the discussion of customer profitability – focusing on the concepts of “customer lifetime value” and “customer equity.” We will examine how to measure long-run customer profitability in both B2C and B2B environments, and the uses of these measures as major components assessing overall firm valuation. Second, we move to the value that the firm provides to its customer – better understanding the true nature of customer satisfaction and its non-trivial relationship with firm profitability. Third, we examine each of the three main components of the firm’s management of its customer base: customer acquisition, development, and retention – and the complex resource allocation task that must be balanced across them. We conclude with coverage of various tactical and organizational aspects of customer relationship management.
This is course is intended to give students:
- Familiarity with the notion of CRM and its various sub-components
- An appreciation of how CRM should fit in with other ongoing firm activities in order to maximize its impact on the organization
- State-of-the-art methods for calculating customer lifetime value and customer equity
- An understanding of ways that firms can create and enhance these sources of value to the customer
- Tools to help students best allocate their firms’ efforts (and dollars) across the critical activities of customer acquisition, development and retention
- Ways to anticipate and avoid common mistakes made by firms as they attempt to create and implement CRM systems
- The course content is rigorous but not excessively analytical, “real world” practical but with an eye towards relevant academic work, and narrowly focused on CRM-type issues but with broad coverage of industries/applications in which they arise.
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