Trends in CRM (Mainly the One Towards Customer-Centricity)

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One-to-One Marketing

The concept of one-to-one marketing mirrors the change in approach from cross-function marketing to customer retention but takes the approach one step further. It represents the concept of increasingly individualized products and/or services with a tailored marketing communication approach. More literally, it means that a company treats any one customer as an individual, and that any one company employee has a general understanding of specific customer value and customer/company history and can serve a particular customer in a personalized manner by accessing even more specific data. In most markets, such an approach can obviously only be carried out successfully with the help of high-tech data warehouses or data marts. These systems enable companies to store all important transaction data and to link this information to so-called touch points, where customers come into contact with service delivery employees (Rapp, Reinhold, "CRM in the Airline Industry") (Jenkins, 1999, p. 319).

In moving toward technology-enabled relationship marketing, there are three possible scenarios:

  • High-tech marketer and high-tech customer-This is the best situation; it has the maximum potential for new value creation and sharing.

  • Low-tech marketer and high-tech customer-From the marketer's perspective, this is the worst situation. Customers can cherry-pick and play one marketer against another. The marketer becomes a sitting duck and margins disappear. In this situation, it is imperative that the marketer acquires technological savvy as soon as possible.

  • High-tech marketer and low-tech customer-This is a middle situation. Its primary drawback is that it is inefficient. The marketer must continue to make expensive low-technology modes of doing business available. This situation calls for the marketer to become adept at marketing the technology itself (Iacobucci & Ostrom, 1995, pp. 560-561).

To be successful in e-CRM and CRM, companies must have to rethink, at the most basic level, how they do business, how they bring products to market, and how they serve their customers. Their business model has to evolve from production-centric to customer-centric. As products have become more commoditized and pricing differences slighter, the great differentiator today is delivering customer value. Perceived value is what leads to increased loyalty, sales and retention rates. "It costs six times more to acquire a new customer than to keep an existing one." What customer-centric companies need is a well-planned, integrated e-business strategy that takes into account both customer needs and corporate business objectives. Only by combining the two can companies reach their objectives of more satisfied customers, increased sales and new revenue streams. These should be CRM's goals in this information age (Camarata, Jane, & Barket, 1998, pp. 23-24).

CRM is now seen as a tool for operations improvements and one can expect to see the shift from product-centric companies to customer-centric organizations and the desire to push customer data to customer-facing employees (Dille, p. 30).

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Managing Data Mining Technologies in Organizations(c) Techniques and Applications
Managing Data Mining Technologies in Organizations: Techniques and Applications
ISBN: 1591400570
EAN: 2147483647
Year: 2003
Pages: 174 © 2008-2017.
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