MKTG 560 Customer Relationship Management

SUMMER 2015

Dr. Ramana Madupalli PhD

2134 Founders Hall

Ph: 618-650-2701 ; rmadupa@siue.edu;
Course Number: MKTG 560 7E2;

CRN: 24889

Class Meets Tuesdays AT 6-00 PM to 9-30 PM IN Founders Hall 2407

Office Hours: Tuesdays 3-30 to 5-30 PM; Other days: By appointment only
COURSE OBJECTIVES:
This course introduces students to the concepts, methods and applications of
Customer Relationship Management. Students will develop an understanding of
theoretical underpinnings and practical considerations of customer relationship
management.
The overall goal of the course is to develop an understanding of the role of CRM in
modern marketing strategies. By the end of the course, students should:
1. Develop an understanding of how a database can be used to develop strong
buyer-seller relationships.
2. Have an understanding of the developmental issues in creation of marketing
databases
3. Develop an understanding of principles and implications of customer
relationship management.
4. Compute and Utilize LTVs and RFMs in planning and executing marketing
strategy
5. Providing an hands on experience with real world applications of CRM
Manipulating a database is a very important for sound decision making in modern
marketing world. A main goal of the course will be to expose students to popular
database analytical operations, including Recency-Frequency-Monetary (RFM), Lifetime
Value (LTV), and model construction. These activities will help students identify the
solutions for who, what, where, how, when and why questions about and of customers

COURSE MATERIALS: This course uses a lot of materials from various sources.
BOOKS:
There is no mandatory book for this class. But I advise to purchase one of these.
1. Customer Relationship Management A Databased Approach; Kumar and Reinartz
2. Measuring Marketing: 103 Key Metrics; Davis (Not Mandatory, but a must one for
every marketing professional)
3. Managing Customers as Investments; Gupta and Lehmann (Highly Recommended; My
Favorite Book 1)
4. Managing Customer Relationships; Peppers and Rogers (Highly Recommended)
5. Harvard Business Review on CRM (Highly Recommended)
6. Database Marketing; Blattberg, Kim and Neslin (Very Expensive, but the next bible of
CRM / DM)
7. Contemporary Database Marketing; Baier, Ruf and Chakraborty
8. Strategic Database Marketing; Hughes and Middleton
9. Principles of CRM; Baran, Galka and Strunk
10. Driving Customer Equity; Rust, Zeithaml and Lemon (My Favorite Book 2)
11. Customer Equity Management; Rust, Lemon and Narayandas
12. Customer Relationship Management; Buttle (VERY GOOD BOOK)

PAPERS:
(All the papers will be posted on BlackBoard. Alternatively, students may also
obtain them through library website)
Introduction
1. What drives customer equity?; Lemon,Rust, Zeithaml; Marketing Management Spring
( 2001)
2. Crash course in Customer relationship Management ; Harvard Management Update;
March 2000
3. Know what to Sell, when, and to Whom; Kumar, Venkatesan, Reinartz; Harvard Business
Review; March 2006
4. What People want (and How to predict it); Davenport, Harris; MIT Sloan Management
Review; winter 2009
5. The Mismanagement of Customer Loyalty; Reinartz, Kumar; Harvard Business Review;
July 2002

Relationship Marketing
1. Preventing the premature death of relationship marketing; Fournier, Dobscha and Mick;
Harvard Business Review; 1998
2. The Perfect Message at the Perfect Moment; Kalyanam, Zweben; Harvard Business
Review; November 2005
3. Putting the Relationship back into CRM; Fournier and Avery; Sloan Management
Review, 2011

CRM Introduction
1. A framework for Customer Relationship Management ; Winer; California Management
Review; Summer 2001
2. AVOID THE FOUR PERILS OF CRM; Rigby, Reichheld, Schefter; Harvard Business
Review; February 2002
3. CRM Done Right; Rigby, Ledingham; Harvard Business Review; November 2004

Customer Management
1. Customer Centered Brand Management; Rust, Zeithaml, Lemon; Harvard Business
Review; September 2004
2. The Quest for Customer Focus; Gulati, Oldroyd; Harvard Business Review; April 2005
3. What People Want (and How to Predict It); Davenport, Harris; Harvard Business Review;
Winter 2009

4. The Right Way to Manage Unprofitable Customers; Mittal, Sarkees, Murshed; Harvard
Business Review; April 2008

Customer Value
1. What drives customer equity?; Lemon,Rust, Zeithaml; Marketing Management Spring
( 2001)
2. How Valuable Is Word of Mouth? Kumar, Petersen, Leone; Harvard Business Review;
October 2007

Customer Analytics
1. Choosing the Right Metrics to Maximize Profitability and Shareholder Value Peterson,
McAlister, Reibstein, Winer, Kumar, Atkinson; Journal of Retailing (2009)

Customer Lifetime Value

1. Customer Life time Value Modeling; Lucas, Risk (Only on BB)
2. A model to determine customer lifetime Value in a Retail Banking context; Haenlein,
Kaplan,Beeser; European Management Journal Vol. 25, No. 3, pp. 221234, June 2007
3. Marketing when Customer Equity Matters; Hanssens, Thorpe, Finkbeiner; Harvard
Business Review; May (2008)

Loyalty Programs
1. The effects of loyalty programs on customer lifetime duration and share of wallet;
Meyer, Waarden; Journal of Retailing ( 2007)
2. Your Loyalty Program Is Betraying You; Nunes, Drze; Harvard Business Review; April
2006
3. Building and sustaining profitable customer loyalty for the 21st century; Kumara,
Shahb; Journal of Retailing 80( 2004)

Churn
1. Customer segmentation and strategy development based on Customer life time value :
A Case study; Kim, Jung , Suh, Hwang; Expert systems with applications 31( 2006)
2. Modeling churn using customer lifetime value; Glady, Baesens, Croux; European Journal
of Operational research 197; 2009

CRM and B2B

1. Building Loyalty in Business Markets; Narayandas; Harvard Business Review; September
2005
2. Customer Value Propositions in Business Markets; Anderson, Narus, Rossum; Harvard
Business Review; March 2006

GRADING
1.
2.
3.
4.
5.
6.

Group Case Summaries (3 * 50) 150 points

Group Case Report 1 + Discussion 100 points
Mid Term Exam 200 points
Final Exam 200 points
Class Participation 100 points
Assignments: 250 points
TOTAL
- 1000 points

COURSE PEDAGOGY
This course uses different content delivery ways in fulfilling earlier mentioned
objectives

1. Regular Powerpoint and Normal Lectures

2. Videos
3. In-Class Mini Case Discussions
4. Major Case Presentations (Instructions will be available on blackboard)
5. Midterm Exam
6. Final Exam

SCHEDULE (Tentative. Final Schedule will be given in Class 2)

Introduction to the Course

PART 1 CRM Overview
- Introduction to CRM
- Where to put in marketing dollars?
June 9
PART
-

2 Relationship Marketing and CRM

Theory of Relationship Marketing
Models of CRM
CRM Fundamentals and Framework
Implementing CRM Strategy

Group Formation
In-Class Assignment 1
In-Class Assignment 2
Mini Case Due in 48
Hrs

PART 3 Customer Management and

Databases Management
- Customer Value
- Customer Value Models / Framework
- Customer Management
- Databases and Datamining

June 16

Major Case Discussion (Dr. Madupalli)

Hilton Hotels: Brand Differentiation through
Customer Relationship Management
Discussion Questions
- What is Hiltons core business? What is the value
of a brand in the lodging industry
- Evaluate the performance of the Customers Really
Matter initiative to date
- What do you think Hilton leadership should do
after the Blackstone acquisition? Should they
further invest in CRM or simply maintain the status
quo? What aspects of Hiltons CRM should be
strengthened, if any and how?

- Case Summary Due

June 23

Major Case Discussion (Dr. Madupalli)

Canyon Ranch
Discussion Questions
- Should Canyon Ranch engage in a personalization
and CRM strategy? Why?
- How do you judge their current use of CRM
Concepts
- What should Canyon Ranchs Strategy look like?
Focus on Canyon Ranch in the Berkshires
- Design an appropriate IS/IT
PART 4 Customer Based Marketing Metrics

- Case Summary Due

PART
-

June 30

Traditional Marketing Metrics (Market Share,

Sales Growth)
Primary Customer Based Metrics (Acquisition,
Retention and Active metrics)
5 Customer Value Metrics
Popular Customer-based Value Metrics
Strategic Customer-based Value Metrics
Popular Customer Selection Strategies

Major Case Discussion (Dr. Madupalli)

Rosewood Hotels & Resorts: Branding to Increase
Customer Profitability and Lifetime Value
Discussion Questions
- Why is Rosewood considering a new brand
strategy?
- What are the pros and cons of moving from
individual brands to a corporate brand?
- Will the move to corporate branding
maximize customer lifetime value
PART
-

- Case Summary Due

6 - Loyalty Programs
Satisfaction-Loyalty-Profit chain
Objectives of Loyalty Programs
Design Characteristics of Loyalty Programs
Reward Structure

July 7

Mid Term Exam

July 14

Major Case Discussion (Group 1)

Harrahs Entertainment Inc
Discussion Questions
- Effectiveness of the Database Marketing Programs (including budget side)
- Why is it important to use the customer worth in the DBM efforts rather
than observed level of play?
- How does Harrahs integrate the various elements of its marketing strategy
to deliver more than the results of Database Marketing?
- Can Harrahs strategy be replicated
Major Case Discussion (Group 2)
Cabo San Viejo: Rewarding Loyalty
Discussion Questions
- What are the characteristics of Cabo San Viejos customer base? How healthy
is this customer base?
- Should CSV adopt a rewards program?
- If the firm were to adopt a rewards program, what should its strategic
objective be? What problem should the firm be trying to solve? What is the
biggest problem facing this firm (in terms of customer management)
- If the firm were to adopt a rewards program, how should it be structured? On
what basis should points be awarded? What types of rewards should the firm
offer?

PART 7- Advanced CRM Analytics

- Churn Modeling
- Market Basket Analysis
Major Case Discussion (Group 3)
Hilton HHonors Worldwide: Loyalty Wars
Discussion Questions
- How can a loyalty program help the property operator and brand owner
manage customers better?
- Can you quantify the value of the HHonors program to Hilton? How does
the value generated by the program compare to the programs cost?
- If a franchisee had the choice of putting the Hilton brand or one of the
Starwood brands onto its property, how would they assess the value of
doing so?
- What is Starwood doing and How should Hilton respond?

July 21

Major Case Discussion (Group 4)

Carnival Cruise Lines
Discussion Questions
- How did Carnivals management build the line into the dominant brand
in the industry?
- Should Carnival do CRM? What should CRM look like at Carnival? What
does CRM mean to Carnivals management?
- How should Carnival go about implementing a CRM Strategy?
- What else should they do to leverage customer data for enhancing the
guest experience and the companys bottom line?
Major Case Discussion (Dr. Madupalli)
Kansai Digital Phone: Zutto, Gaining Japanese Loyalty
Discussion Questions
- What is the value of a KDP customer in 1997? For this calculation you may
want to use the information in the Customer Economics section of the case.
What are your assumptions when doing this calculation
- How should Katagi structure Zutto for maximum value? Please think about
how each of your design choices will affect the value of the initiative
- What advice would you give to John Lincoln for designing the handset
renewal program?
- How should Katagi prioritize among the options that the A-sen team has
generated

July 28

Buffer Class / Final Exam

Class Participation

An integral part of any learning process is to communicate what you know. I believe
that a student can learn a lot from participating in class discussions and hence class
participation is an important component of your grades. Attending every class does
not count for class participation. You must participate in classroom discussions. Also
namesake participation should be avoided. Constructive comments and discussions
are well rewarded. Merely attending classes does not guarantee an A. Even if you
come to every class, it doesnt mean you get full points for your participation. This is
the only subjective assessment component in entire grading structure. I will take a
decision on students class participation grade on the last day of classes. I WILL NOT
ENTERTAIN ANY QUESTIONS ON MY ASSESSMENT IN THIS PART OF THE GRADE. MY
DECISION ON THIS PART IS FINAL. You will start your class participation grade at 25/50
points and depending on your contribution; this score might go up or down.

Academic Honesty

All university and college regulations concerning withdrawal and academic honesty
will apply. Students are expected to recognize and uphold standards of intellectual and
academic integrity. The university assumes as a basic and minimum standard of
conduct in academic matters that students be honest and that they submit for credit
only the products of their own efforts. Students should be familiar with the universitys
policy on issues such as plagiarism, unauthorized collaboration, falsification and
multiple submissions. Lack of knowledge of this policy is not an acceptable defense to
any charge of academic dishonesty. Penalty for plagiarism and academic dishonesty
will be in line with the university policies
MOST IMPORTANT RULE: All cell phones must be switched off and stashed
inside your bag. Keeping them on silent is not enough. ANY DEVIATION
FROM THIS RULE WILL GIVE YOU AN AUTOMATIC ZERO ON CLASS
PARTICIPATION GRADE. When caught, I might even ask you to leave my
class. Repetition will give you further (-50) points for each instance.