To receive credit for this exercise, create a new journal entry and answer the following questions.
- One of the common uses of customer relationship management (CRM) in consumer markets is to rank customers on profitability or lifetime value measures. Highly profitable customers get special attention, while unprofitable customers get poor service or are often “fired.” What are the ethical and social issues involved in these practices? Could CRM be misused? How and why?
- Think about all of the organizations with which you maintain an ongoing relationship (banks, doctors, schools, accountants, mechanics, etc.). Would you consider yourself to be unprofitable for any of these organizations? Why? How might each of these organizations fire you as a customer? What would you do if they did?
- Given the commoditized nature of many markets today, does customer relationship management—and its associated focus on quality, value, and satisfaction—make sense? If price is the only true means of differentiation in a commoditized market, why should a firm care about quality? Explain.
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