Assignment : Information Systems
Devneeta Law Bhusan
1. Rajat, a young entrepreneur is planning to invest in a new chain of restaurants. In his opinion, keeping customers happy, not only by providing good food, but also excellent service is the key to staying competitive.
a) Explain in your own words, how customer relationship management is proving to be a successful tool for organisations to retain and attract new customers. b) Suggest different ideas that Rajat can use to keep the customers happy in his chain of restaurants.
(Total : 718 + 752 = 1470 words)
1a. Delighting the Customer
Building relationships with customers has become a necessity in the present scenario with the increasing competition and globalisation of markets. Not just Rajat, but all businesses are focusing on excellence in service and customer delight. Like our young entrepreneur, most businesses with potential profit maximisation in mind, are turning to customer relationship management in order to better understand customers as it explicitly recognises the long-run value of potential and current customers.
So what is CRM? The central theme of CRM is carefully selecting the most valuable customers and maintaining and strengthening relationships with those customers for long term profit growth. Experts view CRM as a “comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer”.
With traditional marketing and mass advertising proving to be ineffective in a commoditised environment, businesses are fast adopting CRM. While seeking to increase revenues, profits, and shareholder value through targeted marketing activities directed toward developing, maintaining, and enhancing successful companycustomer relationships, the ultimate goal of any CRM system is to increase profit and help build a flourishing scope for business by developing strong and deep relationship with the customer through a holistic approach.
Competition in the form of product price and quantity is the driving force behind transactional marketing, and firms offer value to customers in regard to the firm’s own self interest. A number of factors have contributed to the emergence of customer relationship management including technology, total quality management, growth in the service industry, and heightened customer expectations.
Technology is at the heart of CRM development and is essential on multiple levels of the process. Technological advancements in database programs have allowed marketers to improve targeted direct marketing tactics by recording customer patterns using information from several external and internal sources regarding demographics, psychographics, survey results and purchase patterns. As an example, in the service sector, businesses like Specialty Restaurants (with brands like Mainland China, Sigree, Oh Calcutta etc) are successfully reaching out to customers with offers, customisations like birthday/anniversary celebrations.
The practice of total quality management has also contributed to the development of customer relationship management. Integrating all divisions and levels of a firm with the goal of emphasising employee teamwork, constant improvement, quality measurement, and efficient problem solving resulting in closer relationships between firms, suppliers and customers, TQM adds value and ensures quality control all along the production chain. Organisations like Taj Hotels use TQM to ensure high quality food service and low wastage of materials.
Growth of the service industry too has contributed to need for CRM implementation. As middlemen disappear from the equation, it is more common to see customers as the “co-producers” when they customise products and interact with employees and websites on a far more intimate level.
With every customer interaction that takes place...
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