Marketing Mix Paper

CHAPTER 5:

The Future of Collaborative Customer

Relationship Management: Integrating

Demand and Supply Chains

Jim Duffy

Deloitte Consulting, New York, USA

Peter Koudal

Deloitte Consulting, New York, USA

5

Stephen Pratt

Deloitte Consulting, New York, USA

5.1

Introduction

Consumer businesses that effectively link their customer management and supply

chain operations to boost customer satisfaction and profitability are twice as profitable as competitors that do not do so. They are two to five times more likely to

achieve superior performance in sales, market share, customer service and other key

measures, and much more likely to generate higher shareholder returns (Figure 5.1).

These are just some of the findings of an extensive global study we conducted

with nearly 250 major consumer businesses and their executive teams in 28 countries throughout North America, Europe, Asia-Pacific, Latin America, and South

Africa.1

Companies such as Colgate-Palmolive and Heineken that have linked their

supply chain and Customer Relationship Management activities have created what

we refer to as “digital loyalty networks” – digital in that their demand-generating

and supply-chain operations are linked through information technology; loyalty

based in that higher customer loyalty and profitability is the objective; and net

1

The first study in this series, Deloitte Research—Manufacturing Institute, Digital Loyalty

Networks: e-Differentiated Supply Chain and Customer Management (New York:

Deloitte Consulting and Deloitte & Touche, 2000), was conducted in collaboration with

the Stanford Global Supply Chain Management Forum and launched at the joint Stanford-Deloitte executive conference at Stanford University “Creating Digital Loyalty

Networks: e-Integrating SCM and CRM,” in September 2000.

Jim Duffy, Peter Koudal, and Stephen Pratt

High

Collaborators

Loyalty Networkers

100% more

profitable

32% more

profitable

27%...