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Customer Relationship Management


Merlo O.

Course director


Course objectives
This course strengthens students’ ability to:

  • Build and maintain profitable relationships with customers
  • Use marketing tools to be more influential within organisations
  • Contribute to the development and implementation of effective customer relationship initiatives.
  • Design and deploy customer strategies for superior financial performance

Course description
The profitability of businesses increasingly depends on their ability to build and sustain strong relationships with customers and other key stakeholders. Effective relationship management has become of critical importance in any industry and is thus an essential skill that managers need to master.

This course analyses how to manage customer relationships for superior financial performance. The focus is on managing relationships with both external customers (e.g., consumers, buyers, agents) and internal customers (e.g., employees, different functional areas and departments). It offers insights, best practices, and some of the latest ideas on how to manage relationships for profit, and how to sustain trust and loyalty over time. Students examine methods for building enduring customer relationships, ways of nurturing trust and commitment, and communication strategies that enhance customer relations and loyalty.

The first part of the course lays the foundations for understanding the business case for customer relationship management, the economics of customer relationships, customer behaviour, and key elements of strong relationships and loyalty. The second part focuses on the specific strategies, tactics and communication tools that can help defeat customer apathy, build customer intimacy, establish enduring relationships, and turn customers into partners, advocates and loyalists.

Learning methods
The course is a based on a combination of lectures, class discussion and case study analysis. There is usually also a guest speaker. 

Minimum 80%

Examination information
The final assessment for this course is based on a final written exam worth 70% of the final mark.

There is also a group-work element, worth 30% of the final grade, held in the final lecture. 

Required material
The following book is the recommended reading in the course:

Omar Merlo (2020) Strategic Marketing, Amazon: London.

While students are not required to do any pre-readings, those wishing to expand on the material covered in class can refer to the following papers:

  • Reichheld, F. (2006) “The Microeconomics of Customer Relationships” Sloan Management Review, 47(2), 73-78.
  • Winer, R.S. (2001) ”A Framework for Customer Relationship Management”, California Management Review, 43(4), 89-105.
  • Gouthier, M. & Schmid, S. (2003) "Customers and Customer Relationships in Service Firms: The Perspective of the Resource-Based View", Marketing Theory, 3(1), 119-143.
  • Bhattacharya, C.B. & Sen, S. (2003) "Consumer-Company Identification : A Framework for Understanding Consumers’ Relationships with Companies", Journal of Marketing, 67(April), 76-88.
  • Lilijander, V. & Roos, I. (2002) "Customer-Relationship Levels—From Spurious to True Relationships", Journal of Services Marketing, 16(7), 593-614.
  • Colgate, M.R. & Danaher, P.J. (2000) "Implementing a Customer Relationship Strategy: The Asymmetric Impact of Poor vs Excellent Execution", Journal of the Academy of Marketing Science, 28(3), 375-387.
  • Bigham Bernstel, J. (2001) "Strained Relationships", ABA Bank Marketing, December, 14-19.
  • Merlo, O., Eisingerich, A.B. & Auh, S. (2014) “Why Customer Participation Matters”, MIT Sloan Management Review, 55, 81-88.
  • Eisingerich, A.B., Auh, S. & Merlo, O. (2014) “Acta Non Verba? The Role of Customer Participation and Word of Mouth in the Relationship Between Service Firms' Customer Satisfaction and Sales Performance”, Journal of Service Research, 17, 40-53.
  • Auh, S., Bell, S. J., McLeod, C. S. & Shih, E. (2007) “Co-Production and Customer Loyalty in Financial Services", Journal of Retailing, 83 (3), 359-70.
  • Reichheld, F.F. & Sasser, W.E. Jr. (1990) "Zero Defection: Quality Comes to Services", Harvard Business Review, September-October, 3-8.
  • Rigby, D.K, Reichheld, F.F. & Schefter, P. (2002) "Avoid the Four Perils of CRM", Harvard Business Review, 5-11.
  • Saubert, W.M. (2009) "Using Customer Analytics to Improve Customer Retention", Bank Accounting & Finance, April-May, 33-38.
  • Lings, I.N. (2004) "Internal Market Orientation Construct and Consequences", Journal of Business Research, 57, 405-413.
  • Merlo, O. (2009) “How to win friends and influence people. Your people”, The Human Factor, January, 68-71.
  • Reichheld, F. (2001) “Lead for Loyalty”, Harvard Business Review, July, 76-84.
  • Reinartz, W. & Kumar, V. (2002) "The Mismanagement of Customer Loyalty", Harvard Business Review, 80(7):86-94.
  • Bloemer, J., de Ruyter, K. & Wetzels, M. (2012) "Linking Perceived Service Quality and Service Loyalty: A Multi-Dimensional Perspective", European Journal of Marketing, 33(11/12), 1082-1106.
  • Reichheld, F.F. (1993) "Loyalty-Based Management", Harvard Business Review, March-April, 64-73.
  • Berman, B. (2006) "Developing an Effective Customer Loyalty Program", California Management Review, 49(1), 123-148.
  • Dowling, G.R. (1997) "Do Customer Loyalty Programs Really Work? MIT Sloan Management Review, Summer, 71-82.
  • Berman, B. (2005) "How to Delight your Customers", California Management Review, 48(1) 129-151.
  • Jones, T.O. & Sasser, W.E. Jr. (1995) "Why Satisfied Customers Defect", Harvard Business Review, November-December, 88-99.
  • Reichheld, F.F. (2003) "The One Number you Need to Grow", Harvard Business Review, December, 1-10.
  • Yei L., Eisingerich A.B., Auh S., Merlo O., & Chun, H. (2015) “Service Firm Performance Transparency How, When, and Why Does It Pay Off?”, Journal of Service Research, 18(4).
  • Merlo, O., Eisingerich, A.B., Auh, S. & Levstek J. (2018) "The Benefits and Implementation of Performance Transparency: The Why and How of Letting your CUstomers ‘See Through’ Your Business", Business Horizons, 61, 73-84.
  • Hess, R.L., Ganesan, S. & Klein, N.M. (2003) "Service Failure and Recovery: The Impact of Relationship Factors on Customer Satisfaction", Journal of the Academy of Marketing Science, 31(2), 127-145.
  • Hart, C. W. L., Heskett, J. & Sasser, W. E. Jr. (1990) "The Profitable Art of Service Recovery", Harvard Business Review, 68(4), 148-56.

Case Studies
A number of case studies are also employed for class analysis and discussion and these will be made available to students before the start of the course.