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Customer Relationship Marketing Essay

3301 words - 14 pages

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Customer Relationship Marketing

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Customer Relationship Marketing

The Importance Of CRM in Business-to-Business Practices
The Importance Of CRM in Business-to-Business Practices

Contents
1. Introduction 2
2. The Importance of Customer Relationship Marketing 3
2.1 Business Buyer Characteristics 4
2.2 Collaborative Relationships 5
3. Customer Relationship Marketing Strategies 6
3.1 Acquiring the right Customers 6
3.2 Crafting the right value proposition 7
3.3 Instituting the best process 8
3.4 Motivating employees 8
3.5 Learning to retain customers 9
4. Conclusion ...view middle of the document...

In the 1990s, Relationship marketing went further than locating specific customers. Businesses realised the need to retain customers through formulating strategies that would keep the customers loyal (Businessweek, no date). Furthermore this provided an opportunity for companies to create a communication channel open for their customers that would facilitate a two-way conversation between customers and suppliers (Businessweek, no date). This brought the rise of loyalty cards, bonus points in business-to-consumer companies such as Clicks and Woolworths. However, this method was predominantly useful for larger consumers in the business-to-business market who are a more lucrative segment and the subject of this essay.
Customer Relationship Marketing provides a competitive advantage to companies through offering support for customers on a continuous basis whilst focusing on each customer’s needs and wants and ensuring that these are fulfilled in the best way possible (Hutt and Speh, 2004). Such a strategy can successfully retain customers and decrease the amount of money companies have to spend to seek new customers (Hutt and Speh, 2004). This reveals the importance of managing the CRM and ensuring that all staff are well-equipped with knowledge of how to treat customers and how to cope with any problems or grievances that might arise from being involved directly with the customers (Taylor, 2007). This essay will focus on the Customer Relationship strategies in a business-to-business world, whilst outlining the importance of CRM and its use in the South African context.
2. The Importance of Customer Relationship Marketing
Customer Relationship Marketing is important for various reasons. As the amount of small businesses increase in South Africa so does the need to improve business practices. CRM can be very useful for small companies handling complex transactions occurring with collaborative relationship management (Wilson, 2011). The system is therefore more resourceful as it supports the efficient handling of money, the facilitation of updated information about the customers and communication with the customers, allowing feedback about the product and services provided by the suppliers. This not only assists with efficiency and a reduction of costs and defects but also results in customer satisfaction and higher profits (Wilson, 2011).
Customer Relationship Management can help retain customers (Taylor, 2007). The effect of this is great on the company because a reduced amount is disbursed in the search for new customers than is spent in the maintenance of the current customer database. This is shown by the struggle of out-suppliers to secure a contract with a company in a new task or modified rebuy in comparison to in-suppliers that already have business with the customers (Hutt and Speh, 2004).
Furthermore, Customer Relationship Marketing is an efficient method for a supplier to become the ‘Master of the Moment’ (Wilson, 2011). This...

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