Customer Relationship Management

Topics: Customer relationship management, Marketing, Customer service Pages: 45 (8020 words) Published: May 7, 2014
CRM1 - 18.09.2012

What is Customer Relationship Management?
“CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer related data and enabled by information technology.” Type of CRM


Dominant characteristic
Strategic CRM is a core customer-centric business strategy that aims at winning and keeping profitable customers.


Operational CRM focuses on the automation of customer-facing processes such as selling, marketing and customer service.
Analytical CRM focuses on the intelligent mining of customer-related data for strategic or tactical purposes.
Collaborative CRM applies technology across organizational
boundaries with a view to optimizing company, partner and customer value.

Customer Centricity and Other Businesses
• Product-oriented businesses believe that customers choose products with the best quality, performance, design or features.
• Production-oriented businesses believe that customers choose low-price products. • Sales-oriented businesses make the assumption that if they invest enough in advertising, selling, public relations (PR) and sales promotion, customers will be persuaded to buy. • A customer or market-oriented company shares a set of beliefs about putting the customer first. It collects, disseminates and uses customer and competitive information to develop better value propositions for customers. A customer-centric firm is a learning firm that constantly adapts to customer requirements and competitive conditions.

Is it all about SERVICE ?
•The non-material equivalent of a good
•Economic activity that does not result in ownership
•The product is the act of delivery
A service is:
• Intangible
• Variable
• Perishable
• Are difficult to evaluate
• Are assessed based on experience and credence
Traditional customer service is something you 'do to' the customer Modern Customer Relationship Management is 'done with' the customer 1

CRM1 - 18.09.2012

• ongoing, cooperative, and built for the long term.
Misunderstandings about CRM
• CRM is database marketing
• CRM is a marketing process
• CRM is an IT issue
• CRM is about loyalty schemes
• CRM can be implemented by any company
Managing Customers Entails
• knowing what customers want and need - which enables you to focus your production and service efforts
• knowing which products or customers have most growth potential – which enables you to focus on developing highest potential
• knowing which products or customers are most or least profitable - which enables you to focus on maximizing profit
• knowing which customers will be advocates and supporters - which enables you to provide references, case studies, and to safely test new products and services
Banks vs. Industrial Manufacturers
• Many individual customers with many variable needs/wants • Focus on cross-selling products to generate higher per customer spend • most bankers resort to customer grabbing, rather that customer cultivation and creation, resulting in “customer churn”

• Contact Centers


CRM1 - 18.09.2012

• Rarely in contact with end user
• CRM focused on intermediaries
• Supply chain dependent
• JIT / Lead time / resource difficulties
• Far longer chain (factory to dealer)
• CRM over long periods
• Much more outsourcing
• Service / repair may be only strong contact
Commercial Contexts of CRM - Examples
• Banks – deal with large number of individuals, analytical capability to manage customers defections rates and to enhance cross-selling
• Car manufacturers – sell through distributor/dealer network, develop better & more profitable relationships with distribution networks
• High-tech companies – complex products sold by partner organizations, collect customer information, segment the base, automate the sales...
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