Brand and CRM

Brand building

Brand building 50 yrs ago - few marketing people in a small room discuss & decide, This is what our brand will be, and then spend a lot of money on TV advertising and that was your brand. If you as a consumer only had your neighbors to talk to, you had to believe what the TV was telling you.

Today anyone, whether it is an employee or a customer, if they have a good or bad experience with your company - blog or Twitter about it and it can be seen by millions of people. Its what they say now that is your brand.

Relevance of Brand in building CRM

Brands reduce search costs by clearly identifying one product as different from others Over time, customers assign meanings to brands. A customer who understands what the brand means is less at risk than a customer who does not understand Brands also offer an implicit assurance of a particular customer experience 1. Brand acts as a magnet which attracts new customers to the firm By building brand awareness and recognition- the firm can attract new customers to the firm 2. The brand acts as a reminder to customers For the firms current customers- the brand serves to remind the customers about the firms products and services and to ensure that a firms customers continue to think about the firm 3. The brand acts as the customers emotional tie to the firm - Customers who have strong relationships with a brand may closely identify with the brand. Thus few of them may be in a committed relationship or a fling etc

Relevance of Brand in building CRM

Differentiated customer experiences are so singular that they become the embodiment of the brand. (Known as Branded customer experiences)

Customer experience is important because it influences future buying behaviour and word-of-mouth
Challenge for CR managers is to ensure the customers experience is consistent across all touchpoints. E.g., if a campaign manager mails out a customer offer, all the sales reps must be informed of the offer before they call on a customer to discuss pricing. MOT (Moment of truth) - any occasion the customer interacts with, or is exposed to, any organizational output which leads to the formation of an impression of the organization. MOT occurs during customer interactions at touchpoints

Relevance of Brand in building CRM

Low involvement product categories - Customers feel very little sense of commitment to any brand and are therefore easily switched to competitors. Adding additional benefits helps brand owners to increase the level of customer involvement

Product modification -changing the product in some way so that it ties in more closely to the customers needs, values and interests - Diapers (boys/girls, day/night, babies of different weights)

Product association -linking the brand to some issue or context that is of high importance to customers. -PlayStation links a soccer computer game to the FIFA World Cup

Relevance of Brand in building CRM

Customers who are not committed are more likely to be available to switch to another provider Commitment, in turn, is a function of satisfaction with the brand or offer, attractiveness of the alternatives and involvement in the brand or offer. Involvement is low if the product or its usage context is relatively unimportant to customers. Strong brands rule for employees as well as customers. Talented employees may be drawn to companies whom they've identified as "great places to work." In turn, these employees show greater commitment, stay longer, and feel a greater sense of personal loyalty Customers drive the success of brands but brands are necessary touchpoints that firms have, to connect with their customers

Brand Equity

Brand Equity The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent

E.g., The additional money that consumers are willing to spend to buy Coca Cola rather than the store brand of soda is an example of brand equity.

A brand's power is derived from the goodwill and name recognition that it has earned over time, which translates into higher sales volume and higher profit margins against competing brands. Brand equity is a good barometer to understand past action and future course of action for marketers, who are active in formulating strategies for a given brand. If in present, customer has developed favorable attitude towards the brand then it is a clear indication that past investment (time, money, etc) have found their mark. Brand knowledge is a key factor in establishing brand equity. Brand knowledge which is crucial in evolution of brand equity consists of brand awareness and brand image

How CRM helps to create Brand Equity?

Brands develop a personality based on the people who represent them. Customer loyalty is established because customers like doing business with a particular brand Customer based brand equity differential effect brand knowledge has on customer response to the marketing of a brand

Customer Equity - Sum of lifetime values of all customers. The aim of (CRM) is to produce high customer equity.
Today, customers place their confidence in the shared and communal experiences of others through social community networks which provide transparency on valued customer experiences in the marketplace CRM Application vendors in the marketplace are vying to provide technology solutions for enterprises to integrate and use these social networks as part of core enterprise ERP and CRM solutions.

How CRM helps to create Brand Equity?

CRM creates value for customers and firms. CRM increases customers' brand awareness, brand association, brand loyalty

In addition, CRM implementation enhances a firm's efficiency and also provides better goods and services for customers
Companies tend to benefit a lot as consumer will stick to the brand no matter what price premium they have to shell out. These consumers become sort of brand ambassadors and recommend usage of brand thereby creating consumer based brand equity. Many brands owe much of their success to word-of-mouth. This is usually done by delighted customers. Customer Retention (loyal customers) also leads to word of mouth propagation of the brand Attitudinal Loyalty is reflected in positive effect towards the brand or supplier. Behavioural loyalty is reflected in purchasing behaviour

How CRM helps to create Brand Equity?

A strategy based on customer equity allows firms to trade off between customer value, brand equity, and customer relationship management. Although it may seem obvious that customer equity is key to long-term success, understanding how to grow and manage customer equity is more complex

How to grow it is of utmost importance, and doing it well can create a significant competitive advantage

Value equity Drivers of customer equity

Customer Equity

Brand equity

Retention equity

How CRM helps to create Brand Equity?

These drivers work independently and together. Within each of these drivers are specific, incisive actions, or levers, the firm can take to enhance its overall customer equity. Value equity will be most critical when discernable differences exist between competing products, value equity will be central for purchases with complex decision processes. value equity will be important for most B2B purchases* Relationship equity will be critical when the benefits the customer associates with the firm's loyalty program are significantly greater than the actual "cash value" of the benefits received** will be vital when firms have the opportunity to create learning relationships with customers.