Crm and Its Affectiveness

Topics: Customer relationship management, Customer service, Support automation Pages: 85 (23454 words) Published: August 25, 2013
Chapter 1INTRODUCTION

This chapter will offer an introduction of the preferred topic for dissertation. Firstly presented is the background of the subject, where it will be given its shape. The problem discussion will be presented next, where discussion of the research area will be specified. Upon expounding the problem discussion, the research purpose and the outlined questions to elucidate the purpose will be presented. To conclude, the scope and the limitations to the dissertation will be articulated.

1.1BACKGROUND

The dawn of the 21st century has seen the growing implementation of customer relationship management (CRM) by organizations. Regardless of their size, organizations have been optimistic to employ CRM to generate and maintain the relationship with customers in a more effective manner, in turn to develop a comparative advantage with competitors. According to Ndubisi and Wah (2011), customer loyalty and their retention, which is one of the factors for profitability, can be gained through the means of an enhanced relationship with the customers. Furthermore, the vast expansion of the Internet and constant development of technology has heightened the opportunities for marketing. This has therefore in turn transformed the route through which relationships between the customers and the organization is managed.

Lombard (2010) noted that organizations implement CRM as a strategic business instrument to assist in attaining various organizational objectives. The use of CRM by organizations for a variation of objectives have been identified as; enabling the marketing department to identifying and targeting the desired customers; manage marketing campaigns with clear goals and objectives; assist the organization to increase sales; generate quality leads for the sales force; managing sales by optimizing information shared across multiple departments in the organization; formation of individual relationships with customers, with an intent of maximizing profits and improving customer satisfaction; identifying the most potential customers and providing them with the highest level of service. Enhanced organizations' ability to retain and acquire customers, maximization of customers’ lifetime, and improving service at a lower cost has been indicated as the benefits of CRM (Rootman, 2011).

The only meaningful resource that an organization can gain a real competitive advantage from has been noted as knowledge (Du Plessis, 2010). This notion has been further acknowledged by Rootman (2013), that customer information systems will be implemented by successful organizations to build on relationships on the level that customers desire. The use of CRM places the customers at the center of the organization. It can be comprehended that organizations need to integrate its business processes to achieve greater efficiency and deliver customers effectively, which is associated by CRM. This perspective is denoted further by Kotler and Keliar (2008), as CRM combines the integration of marketing, sales, customer service and supply chain functions of the organization. Furthermore, it is a comprehensive strategy and process that assists in acquiring, retaining and partnering the selected customers to generate superior value towards. the organization and for the customers.

In today’s global competitive market economy where the customers are given the power and brand loyalty attrition is on the rise, a successful organization will tend to opt for the application of customer relationship management (CRM). Kotler and Keller (2006) imply that the use of customer relationship management allows the firm to provide exceptional real-time service to their customers with the means of an effective employmenet of individual account information. It is acknowledged that such a technique requires a mere complex approach. Firstly, the organization would need to investigate their customers’ needs; build upon relationships with both potential and...

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