CRM is the essential part of modern business management. CRM has received a lot of attention and come to occupy a central place as a vital strategy in organization. The ultimate purpose of CRM in any organization is to increase profit. In case of CRM this achieved mainly by providing better services to the customer than the competitors.
Traditionally, customer service centers have always been regarded as cost centers. In the 80s, customer care was not as important as it is today. Many vendors even refused to obtain 800 numbers by which to welcome customer input and provide customer service. Slowly and gradually, the customer got the respect that he or she deserved. Outstanding ...view middle of the document...
Today, CRM is still utilized most frequently by companies that rely heavily on two distinct features like customer service and technology.
What is CRM?
CRM is a business strategy that aims to understand, anticipate and manage the needs of an organization’s current and potential customers. CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers.
Successful organizations use three steps to build customer relationships
• Determine mutually satisfying goals between organization and customers
• Establish and maintain customer relation
• Produce positive feelings in the organization and the customers
Benefits of CRM
• CRM reduces the cost because the right things are being done i.e effective and efficient operation
• CRM enables instant market research as well as opening the lines of communications with customers gives direct constant market reaction to the products, services and performance far better than any market survey.
• Increased customer satisfaction, because they are getting exactly what they want i.e meeting and exceeding expectation.
• Long term profitability and sustainability
• CRM ensures that the focus of the organization is external.
Purpose of CRM
• The focus of CRM is on creating value for the customers and the company over the longer term
• When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their need.
• CRM enables organizations to gain competitive advantage over competitors that supply similar products or services.
Why is CRM important?
• Today’s businesses compete with multi products offering created and delivered by network, alliances and partnerships of many kinds. Both retaining customers and building relationship with other value adding allies is critical to corporate performance.
• The adoption of CRM is being fuelled by recognition that long term relationships with customers are one of the most important assets of an organization.
Customer profitability is the profit the firm makes from serving a customer or customer groups over a specific period of time, specifically the difference between the revenues earned from and the cost associated with the customer relationship in a specific period. Calculating customer profit is an important step in understanding which customer relationships are better than others.
Customer profitability measurement is challenging to implement; it draws into question our understanding of who our customers are and how we make profit. It can add powerful insights throughout business, helping to focus decision making energies on doing what is right for the customers and the shareholders at the same time. In a customer centric organization, measuring customer profitability has become a business imperative; without it there is no fact basis for managing the value exchange between company and...