CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Many companies, individuals, and authors of management books use terms like “customer relationship management” (CRM), “ customer relationship marketing”.

Conceptually, they are all the same, but the methods or techniques involved in achieving the aims are different. For instance, the aim of relationship marketing is to build mutually satisfying long-term relations with key parties, like customers, distributors, and suppliers, in order to earn and retain their long-term preference and business. This is achieved by promising and delivering high-quality (or superior) products and services at reasonable (or fair) prices over a long period of time. This is conceptually similar to partnering or collaborative relationships (or exchanges) that was discussed earlier.

In many companies, management of customer relationships have become an important strategic priority, because loyal customers are more profitable than transactional customers and new customers. It also gives the firm a competitive advantage.

The Customer Relationship Management (CRM) aims to retain each valued customer by developing a long-term relationship and providing and excellent real-time customer service. It improves customer loyalty and Ultimately, the company’s profitability. To achieve these aims, many companies are investing in CRM systems, which include software applications to integrate (a) sales, (b) customer service, and (c) marketing information. The CRM system puts together information received from various sources like e-mail, sales and service persons, and call centers. The CRM software helps the company’s customer service persons, sales persons, intermediaries, and others to have the same real-time information on each valued customer. The software gives information about progress on currents orders, warranty or annual maintenance contract (AMC) services of each customer. It gives up-to-date information to customer contact employees, which help them to give superior customer service.

The CRM technology from organization like Oracle Corporation and Siebel System could be used (a) to gather important data from various sources, (b) change the data into useful information, and (c) make the information available to all the employees in the company. It must be understood that the CERM software or system supports a marketing strategy and the CRM technology or system is different than marketing strategy. The marketing or customer strategy to gain and retain customers must be developed and implemented first. The CRM technology should then be used to support the customer strategy. If this is done effectively, the objectives of CRM to improve customer loyalty and company’s profitability can be easily achieved.