building profitable customer relationship through CRM

Topics: Customer relationship management, Marketing, Interpersonal relationship Pages: 7 (2065 words) Published: November 5, 2013
Defining CRM
Customer relationship management in its broadest sense simply means managing all customer interactions. In practice, this requires using information about your customers and prospects to more effectively interact with your customers in all stages of your relationship with them. We refer to these stages as the customer life cycle. The customer life cycle has three stages: ■ Acquiring customers

■ Increasing the value of customers
■ Retaining good customers
It is a concept of understanding and tracking customer behavior and experiences to customize the offer that forms the basis of any CRM programme in a large company.CRM ties the potential of relationship marketing strategies and IT [information technology] to create profitable, long-term relationships with customers.In order to endure long-term success, the role of marketing in a firm is to contribute to building strong market assets, including a valuable customer portfolio. Customer relationship management (CRM) helps companies improve the profitability of their interactions with customers, while at the same time; makes the interactions appear friendlier through individualization. To succeed with CRM, companies need to match products and campaigns to prospects and customers – in other words, to intelligently manage the customer life cycle. CRM provides enhanced opportunities to use data and information to both understand customers and co-create value with them. This requires a cross-functional integration of processes, people, operations and marketing capabilities that is enabled through information, technology and applications.Customer relationships must be carefully managed and customer loyalty must be earned.Today,customers are looking for suppliers who understand their needs and who can respond to those needs with relevant offers, using the communication channels the customer prefers. Aims of CRM

The CRM is a new technique in marketing where the marketer tries to develop long term relationship with the customers to develop them as life time customers. CRM aims to make the customer climb up the ladder of loyalty. The company first tries to determine who are likely prospects i.e. the people who have a strong potential interest in the product and ability to pay for it. The company hopes to convert many of its qualified prospect into first time customers and then to convert those first time customers into repeat customers. Then the company tries to convert these repeat customers into clients – they are those people who buy only from the company in the relevant product categories. The next challenge for the company is to convert these clients into advocates. Advocates are those clients who praise the company and encourage others to buy from it. The ultimate challenge is to convert these advocates into partners where the customers and the clients work actively together to discover ways of getting mutual benefit. Thus in CRM the key performance figure is not just current market share but share of life time value by converting customers into partners. In CRM the company tries to identify that small percentage (20%) of key account holders whose contribution to the company revenues is high (80%). So from this point of view, CRM is also known as KEY ACCOUNT MANAGEMENT. CRM impacts on the organization

CRM can have a major impact on an organization through:
shifting the focus from product to customer
streamlining the offer to what the customer requires, not want the organization can make •highlighting competencies required for an effective CRM process

Business benefits of CRM
Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to: •increased sales through better timing due to anticipating needs based on historic trends •identifying needs more...
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