9609 · 3.1.7
Customer relationship marketing (CRM) flashcards
Revision flashcards for Cambridge 9609 Customer relationship marketing (CRM) (syllabus 3.1.7). Flip, recall, then mark a real past-paper question.
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CRM purpose?
Build long-term profitable relationships — retention cheaper than acquisition.
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Customer lifetime value (CLV)?
Total profit expected from a customer over entire relationship.
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CRM database uses?
Track purchases, preferences, complaints; segment for targeted campaigns.
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Loyalty scheme benefit?
Encourages repeat purchase; collects data; increases switching costs.
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Personalisation example?
Email with recommended products based on past orders.
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CRM + B2B?
Key account management; track contracts, meetings, support tickets.
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CRM risks?
Data privacy (GDPR), high IT cost, poor data quality, annoying spam.
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Link to 3.1.1?
CRM implements market orientation — responding to individual customer needs.
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What is Customer Relationship Marketing (CRM)?
A marketing strategy focused on building and maintaining long-term, profitable relationships with customers, using data to personalise communication and increase loyalty.
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Define 'customer retention'.
The activities and strategies a business uses to reduce the number of customer defections (churn). The goal is to keep as high a percentage of its existing customers as possible.
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What is 'personalisation' in the context of CRM?
The process of tailoring marketing communications, product recommendations, and offers to the specific needs and preferences of an individual customer, based on data collected about them.
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What is 'data mining' in CRM?
The process of analysing large databases to find patterns, correlations, and trends in customer behaviour. This helps businesses to predict future actions and make informed marketing decisions.
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Why is customer retention often more profitable than customer acquisition?
Because the costs of marketing and sales to an existing customer are much lower. Loyal customers also tend to spend more, are less price-sensitive, and provide free word-of-mouth promotion.