ITPEC IP April 2018 Question 84
Among the business management systems, which of the following has an objective of maximizing customer lifetime value? Here, customer lifetime value is the amount of profit expected to be brought into a company by a customer throughout his/her lifetime.
Explanation
CRM — customer relationship management aims to keep customers for the long term and so maximise customer lifetime value.
Customer lifetime value is the profit one customer brings over the whole relationship. CRM shares customer information such as purchase history, inquiries and complaints across sales, marketing and support, so the company can serve each customer well, raise satisfaction and loyalty, and keep the customer buying for longer.
Answer (a)
Why not others:
- •(b) — ERP (enterprise resource planning) integrates core business functions such as accounting, production and HR to use company resources efficiently
- •(c) — SCM (supply chain management) optimises the flow of goods and information from suppliers through production and distribution
- •(d) — SFA (sales force automation) supports salespeople's daily activities, such as visit records and deal progress; it is a sales tool, not the customer-lifetime strategy
Key rule: Match each system to what it optimises: CRM the customer relationship, ERP internal resources, SCM the supply chain, SFA the sales team's work.
Business Strategy Management · AI-written, may contain errors
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