1. CRM Customer relationship management
“CRM is the overall process of building and maintaining profitable
customer relationships by delivering superior customer value and
satisfaction.” CRM Customer relationship management can be defined: as
strategies focused on increasing customer satisfaction, loyalty, and
profitability by leveraging superior customer knowledge acquired,
stored, and acted upon with the aid of information technology.
2. The basic goals of the CRM are:
Customer relationship marketing provides the key to retaining
customers and involves providing financial and social benefits as well
as structural ties to the customers. Companies must decide how much
relationship marketing to invest in different market segments and
individual customers, from such levels as basic, reactive, accountable,
proactive, and full partnership. Much depends on estimating customer
lifetime value against the cost stream required to attract and retain
these customers.
Total quality marketing is seen today as a major approach to providing
customer satisfaction and company profitability. Companies must
understand how their customers perceive quality and how much quality
they expect. Companies must then strive to offer relatively higher
quality than their competitors. This involves total management and
employee commitment as well as measurement and reward systems. Marketers
play an especially critical role in their company’s drive toward higher
quality. The basic goals of CRM are:
• The idea of CRM is that it helps businesses use technology to gain
insight into the behavior of customers and the value of those customers.
If it works as hoped, a business can:
• Provide better customer service
• Make call centers more efficient
• Help sales staff close deals faster
• Simplify marketing and sales processes
• Discover new customers Enable companies to provide excellent real-time
customer service by developing a relationship with each valued customer
through the effective use of individual account information
• Based on customer attributes, companies can customize market
offerings, services, programs, messages, and media
• Reduces the rate of customer defection
• Increases the longevity of the customer relationship
• Enhances the growth potential of each customer through “share of
wallet,” cross-selling, and up-selling
• Makes low-profit customers more profitable or terminates them
• Focuses disproportionate effort on high value customers
CRM is mainly based upon the customer loyalty that is of great
importance for the marketer because firms have realized the value of
customer retention. Winning a new customer is usually 5- 10 times more
costly than retaining an existing customer Customers are usually more
profitable the longer you keep them. The value of loyalty goes beyond
single customer for the reason that loyal ccustomers
provide more and more credible referrals but the angry gossip of
disloyal customers can devastate a firm.
3. Building Profitable Customer Relationships
Managing demand means managing customers because:
1. A demand comes from new customers and repeat customers.br>
2. Today, besides making efforts to attract new customers, marketers are
going all out to retain and build relationships with existing customers.
It costs five times as much to attract a new customer as it does to keep
a current customer satisfied.
3. Because of changing demographics, a slow-growth economy, more
sophisticated competitors, and overcapacity in many industries, many
markets and market shares are shrinking. The key to successful customer
retention is superior customer value and satisfaction.
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