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CRM is hardly a new concept. Good businesses have been practicing it for centuries-remembering customers' names and family information, monitoring buying patterns and preferences, and promoting new businesses using this information. The difference today is electronic technology, which has increased both the speed and the volume of information exponentially. However, customers are still customers and the key word in CRM is "relationship."

When appropriate customer relationship management instruments are implemented within a business successfully, relationship marketing will benefit everyone involved in the process. Customers benefit from better products and services that are specific and per their desires, needs and want. CRM generates an amount of trust and brand loyalty for the business entity. New opportunities are identified for the business as one of the benefits of CRM. Relationship marketing is developing from advanced database marketing to preliminary relationship marketing on to strategic relationship marketing. Major efforts are required to change the fundamental attitudes of employees, who must be totally oriented towards the needs of the customers in the CRM framework. It is more of a fundamental change in attitude and approach that a company and its employees need to take.

Many industries within the service sectors are facing intense competition. This has led to mergers, deregulation and globalization of the markets. In this competitive environment, customer relationship management offers the necessary tools and methods to compete successfully. The emphasis in CRM should be on building long-term, mutually rewarding relationships with the customer as the focus. This will offer increased new opportunities for increasing the profitability of the firm. In highly competitive markets, cost cutting and competitive pricing strategies are likely to result in early wins with attracting customers from competition. But in most service industries, where there exists a high cost for switching, price advantages cannot offer the only incentive for switching. In these situations, successful strategies to attract and retain customers will depend on developing strong relationships with the customers as well as cross-selling other services. CRM will play a very important role with this strategy.

There should be a balance between the retention and acquisition of customers. Probably the most important lesson for organizations is that they should remember that a customer lost to competition due to dissatisfaction is one that is eventually gained by competition. Retaining existing customers is therefore a key strategic issue. There is a definite link between quality of product and services offered, customer retention and profitability.

Effective use of technologies in the area of CRM is as crucial as selection and deployment of technologies. Technology in itself is not the solution in effectiveuse of CRM but should be considered more as a means to the end.

Customer relationship management is a work in progress. Applying the basics such as trust, power and value and using intellectual capital and developing your own techniques will result in continued improvement (Caldwell, 2000).

CRM means different things in different cultures, and marketers should be as wary of prescribing universal solutions as they are of developing universal production and promotion policies for all markets.

A CRM strategy for a firm should try to satisfy the customers' relational needs and to reduce their general or specific relationships against relationship building. Instead of concentrating on one large benefits category (e.g., confidence benefits), companies should be aware of the possibility for developing an integrative program consisting of different relational benefits.

There are still some parties that question the attempts of machines replacing people in the business/customer relationships. Doubts are being expressed if machines can really automate significant portions of what has been a person-to-person relationship ("Adding Value Through Web-Enabled CRM," 2000, p. 32). The point to be noted here is that business is still about people. The foremost CRM solution architect's difficult yet utterly necessary undertaking is to imagine himself or herself in the customer's shoes. Once there, the question that needs to be asked is, "How would I want all this software, hardware and networking to TREAT ME!!!"

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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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