Customer relationship management (CRM) as a strategy and as a technology has gone through an amazing evolutionary journey. The initial technological approach was followed by many disappointing initiatives only to see the maturing of the underlying concepts and applications in recent years. Today, CRM represents a strategy, a set of tactics, and a technology that have become indispensible in the modern economy. This book presents an extensive treatment of the strategic and tactical aspects of customer relationship management as we know it today. It stresses developing an understanding of economic customer value as the guiding concept for marketing decisions. The goal of the book is to serve as a comprehensive and up-to-date learning companion for advanced undergraduate students, master's degree students, and executives who want a detailed and conceptually sound insight into the field of CRM.
V. Kumar (VK) is the Regents Professor, Lenny Distinguished Chair Professor of Marketing, Executive Director, Center for Excellence in Brand & Customer Management, and Director, Ph.D. Program in Marketing, J. Mack Robinson College of Business, Georgia State University. He has been recognized with seven lifetime achievement awards in Marketing Strategy, Inter-Organizational Issues, Retailing, Business to Business Marketing, and Marketing Research from the AMA and other professional organizations, the Paul D Converse Award, the Sheth Foundation/ Journal of Marketing Long term Impact Award, and the Gary L Lilien ISMS-MSI Practice Prize Award.
He has published over 200 articles in many scholarly journals in marketing including the Harvard Business Review, Sloan Management Review, Journal of Marketing, Journal of Marketing Research, Marketing Science, Management Science and Operations Research. His books include Managing Customers for Profit, Customer Relationship Management (CRM), Customer Lifetime Value, Marketing Research, Statistical Methods in CRM, and International Marketing Research.
He has won several awards for his research publications in scholarly journals including the Don Lehmann Award thrice for the best paper published in the Journal of Marketing/Journal of Marketing Research in a 2-year period, the MSI/Paul H Root Award thrice for the Journal of Marketing articles contributing to the best practice of marketing, the Robert Buzzell Award for the best paper published by the Marketing Science Institute, the Davidson Award for the best paper published in the Journal of Retailing, the Outstanding Paper Award for the best paper published in Forecasting form the International Institute of Forecasters, and the Best Runner-Up Award for the paper published in the Journal of Interactive Marketing. VK was also awarded the Sheth Foundation Best Paper Award for his paper published in the Journal of the Academy of Marketing Science.
VK leads the marketing science to marketing practice initiative at the INFORMS Society for Marketing Science and has worked with Global Fortune 1000 firms to maximize their profits. He also serves as the AE and serves on the Editorial Review Board of many scholarly journals in Marketing. VK spends his free time visiting business leaders to identify challenging problems to solve. He plays Tennis and Basketball to relieve his stress arising out of being in academics. Finally, VK has been chosen as a Legend in Marketingalong with Phil Kotler, Paul Green and Jag Sheth where his work is published in a 10 volume encyclopedia with commentaries from scholars worldwide.
Werner J. Reinartz
His research interests focuses on the dynamics of the consumer-firm interaction. This interest bridges the areas of customer relationship management, retailing, database marketing, and E-commerce. In particular, Professor Reinartz is interested in empirically modeling marketing phenomena in these areas. His research on measuring and managing the lifetime value of customers has received major academic awards:
His research appeared in academic journals such as the Journal of Marketing, Journal of Marketing Research, Journal of Consumer Research, the Journal of Service Research, in Multivariate Behavioral Research, the Journal of Retailing, and in Marketing Letters. In addition his work appeared in the managerial business press such as for example Harvard Business Review, California Management Review, and European Business Forum.
Professor Reinartz has taught on the graduate, Ph.D., and executive level. His teaching portfolio comprises customer relationship management, database marketing, marketing strategy and marketing research. In addition, Professor Reinartz is the progam director for a number of INSEAD clients such as Henkel, Haniel, METRO, and Xerox. He has authored award-winning teaching material, for example the case study, Independer.com, which was the winner in the European Management Foundation (efmd) E-commerce case writing competition 2000. Also, he has co-authored (together with V. Kumar) a textbook on CRM that has been published by John Wiley in 2006.
He has consulted with a variety of international corporations on CRM and Direct Response Marketing, such as for example Cora Group (France), Cincom (Europe) Spiegel (USA), IBM (USA), and Comdirect Bank (Germany).
Professor Reinartz holds a Ph.D. in Marketing from the University of Houston, USA, an MBA from Henley Management College (UK), and a Dipl.-Ing. in Agricultural Economics from Munich University of Technology (Germany).
The data set contains the purchase history of 100 customers for certain hardware, software, and services products during the period 2001 - 2004. The data is organized in such a way that the date of purchase, product purchased, product category, and purchase amounts are given for each customer for each purchase occasion. For instance, customer 1 purchased Desktop PC (hardware category) for $500 during February 2001 (indicated by Feb-01). In addition to the transaction history, the data set also includes information such as number and type of marketing touches, and the contribution margin for each product. This dataset is given in the following file: CLV_data.xls.
Projection of Contribution Margin
In order to project contribution margin in a given year, we need to build the model for contribution margin. This is done by doing a linear regression with 'Contribution margin in 2004' as dependent variable and variables like 'tenure till December 2003', 'average contribution margin per year for the period 2001-2003', and 'the average purchase frequency'. This model using the available data showed the following relationship as significant.
PredCM2004 = -17 + 0.76 * AvgCM2003 + 4*Tenure0103 + 23*Avg_Purchase_Freq, where
PredCM2004 = Predicted Contribution Margin in 2004
AvgCM0103 = Average CM (per year) for 2001-2003
Tenure0103 = Tenure till December 2003.
Applying this model, the predicted contribution margin in 2005, 2006, and 2007 can be computed. The values of predicted contribution margins are obtained by simply entering the values for Average CM and Tenure for appropriate time periods in the worksheet "Enter values" in the following file: CLV_Cal.xls.
The CLV calculator calculates the lifetime value of a customer . You have 2 options to use the CLV Calculator
Do you know how CRM is applied in industry? The links shown below are practical examples of how CRM is being applied across different industries. Please click on the links below for specific examples within that industry