Relationship marketing emphasizes that customer retention affects company profitability in that it is more efficient to maintain an existing relationship with a customer than create a new one (Payne et al., 1999; Reichheld, 1996)
Customer relationship management (CRM) is a complex and holistic concept, organized around business processes and the integration of information technologies. Customer relationship management (CRM) and business-to-business (B2B) are essential to the success of modern business. Although they are two different modules, they share many similarities. The integration of CRM and B2B can benefit all related parties in business processes, ...view middle of the document...
An example is when a shoe manufacturer company orders raw materials from its supplier. Relationship marketing is the heart of B2B approach. Once companies recognized that its suppliers, intermediaries and its customers as business partners, it would then able to establish and maintain strong relationship for long-term mutual benefits.
Customer Relationship Management (CRM) is described as organisational effort in establishing, maintaining and managing strong relationships with its customers. It is a two-way dialogue between a company and its customers to foster relationship. The holistic concept requires clear vision, mission and support from the top management. Management will attune its processes and procedures with the mindset of “looking through the customer’s eyes”. CRM philosophy is customer-focused and its campaign must be communicated well throughout the firm for its success.
Companies today adopt the approach of combining B2B and CRM as they bring about numerous mutual gains. Research has shown that establishing and maintaining customer loyalty is more profitable and requires less time and resources than acquiring new customers. They analysed that operations and business strategies are also easily implemented when business partners or strategic alliances are formed. Firms are able to focus on anticipating its customer’s needs and delivery of product or service offering, creating more value.
Hence, we will analyse the importance of both CRM and B2B and illustrate how it will aid the success of company’s mission, objectives and equipped it with an unrivalled competitive edge.
Characteristics of B2B
B2B focus on establishing close rapport with business partners. These could range from suppliers, intermediaries to clients. Since B2B approach is market-driven, revenues generated from B2B are significantly more than when transactions done with consumer markets. Business markets are characterised by a number of factors, the main ones being the market structure, nature of demands, the buying behaviour and processes and most importantly, the relationship that develop between organisations.
B2B is a business philosophy which allows organisations to link its department specialisations and synchronise its effort with all its business partners in creating value and expand its market share. These can result to companies sharing its data and information with its partners and learn more about market movements and customer behaviours, thus anticipating any changes and new business trends. Trust and commitment for win-win gains are the focal points in establishing strong business relationship. Once attained, firms have the competitive advantage of delivering its product offering more efficiently and profitably.
Business Market Customers Can Be Classified Into Three Categories:
1. Commercial Enterprises
• SMEs, e.g. Minimart and Car Distributor
• Corporations, e.g. Banks and Airline Companies