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Chapter 7 Processes, Organizations, and Information Systems
Marketing Customer acquisition Relationship management Loss/Churn
Attract Sell Support Categorize
and resell

Low-value
customers
Sell more

Target Prospect Customer

High-value
customers

Win back

Figure 7-8
The Customer Life Cycle 5QNKEKVCVKQP 4GNCVKQPUJKR /CPCIGOGPV
Source: Used with permission from 2TQEGUUGU .GCF 6TCEMKPI 2TQEGUUGU
Professor Douglas MacLachlan,
Foster School of Business, 2TQEGUUGU
University of Washington.

Figure 7-8 shows four phases of the customer life cycle: marketing, customer acquisition,
relationship management, and loss/churn. Marketing sends messages to the target market to attract
customer prospects. When prospects order, they become customers who need to be supported.
Additionally, relationship management processes increase the value of existing customers by selling
them more product. Inevitably, over time the organization loses customers. When this occurs,
win-back processes categorize customers according to value and attempt to win back high-value
customers.
Figure 7-9 illustrates the major components of a CRM application. Notice that components
exist for each stage of the customer life cycle. As shown, all applications process a common cus-
tomer database. This design eliminates duplicated customer data and removes the possibility of
inconsistent data. It also means that each department knows what has been happening with the
customer at other departments. Customer support, for example, will know not to provide $1,000
worth of support labor to a customer that has generated $300 worth of business over time.

Relationship
Sales Management
Applications
Applications

Solicitation and
Lead Customer
Management Support
Applications Applications

CRM
Figure 7-9 Database
CRM Applications