Customer relationship management (CRM) is one of the popular approaches used by modern companies and organizations of different types to reach potential buyers. The proposed approach will help KOLO to reach customers in a largely passive and reactive manner, confident that it can select, acquire, understand, and readily retain them as desired. Processes for performance measurement are basic, and so is internal and external communication. KOLO engages in evaluating customer needs, training staff to be more proactive with customers, and creating teams or assigning people to upgrade customer services. In addition, performance-based organizations like KOLO Company more frequently compensate sales and other staff at least partially on customer satisfaction scores (Greenberg, 2004). This type of business requires effective and unique set of management tools in order to reach a customer and retain him (Freeland 2002). The aim of the section is to prove, analyze and evaluate success factors of CRM and impact of these strategies on customer relations.
For KOLO, the goal of CRM is to examine and analyze customers’ needs and wants in order to meet their requirement and expectations. CRM has a great impact on profitability and effective performance of organizations. Freeland (2002) defines customer relationship management as “the dynamic process of managing a customer-company relationship such that customers elect to continue mutually beneficial commercial exchanges and are dissuaded from participating in exchanges that are unprofitable to the company” (p. 3). In modern environment, CRM and development influence productivity because the attention has shifted to a greater emphasis on the management of the whole system and its relationship with other systems. In this situation, CRM can be seen as a mediator which helps to cope with different demands both within the production system itself and between that and other systems. As environments change, they pose new challenges for managers of organizations. Thus, with the emphasis on CRM comes the realization that increasing operating efficiency. CRM influences profitability because it includes changing knowledge and technology, new values, new markets, and changes in the global distribution of wealth. New knowledge, for instance, can invalidate the existing knowledge of an entire industry. “Customers are always looking for more value for their money. One way that companies can provide enhanced value-and realize greater profitability is CRM projects” (Freeland 2002, p. 57). When environments become turbulent, complex, and resource constrained, the knowledge and skills that companies once possessed can become useless, and even a hindrance to change. CRM projects acquire new knowledge and technology, and employ these assets in production quickly (Greenberg, 2004).
KOLO Company, as the supplier company, is entirely customer-driven, proactively approaching customers as partners. It is strategically directed toward keeping customers, with attaining commitment and loyalty (of both staff and customers), a paramount objective. Management style is often lattice or horizontal, with company focus on constant improvement in all activities: understanding and serving customers, creating awareness and information flow around customer needs, employees’ communication and empowerment, team process, and so forth. Performance measurement is continuing, with improvement activity prioritized around customer retention, their intended service market action, and proclivity to remain loyal (Greenberg, 2004). The KOLO Company has greater awareness and sensitivity concerning potential buyers. Though management still tends to function from a traditional hierarchy, KOLO has formal processes in place for measuring performance and collecting/acting on complaints.
The main proposed forms of CRM will be database for customer lifecycle, front-of-house customer service, employees training, information management and on-line support. At KOLO, buyer needs are better understood because there is regular interface with them by multiple levels of staff. Employees are trained to be proactive with buyers, gathering information on their requirements and sharing that feedback internally. Customer service presentation is regularly evaluated and teams may be created to improve retail services and other operational processes. According to Newel (2003), technology is a one of the environmental factor that continually threatens existing arrangements. At times, technical changes occur so radically as to constitute a “technological discontinuity,” a sharp break in business practice that either enhances or destroys the competence of organizations in an industry. Fast-changing technologies, such as information technology, create a particular threat to organizations. Such researchers as Greenberg (2004) discuss the role of technology in CRM and emphasize the need of successful relations. The combination of goal difficulty and the extent of the person’s commitment to achieving the goal regulate the level of effort expended. If employees understand specific CRM goals they perform better than employees with no set goal or only a vague goal such as do the best you can (Nicho 1009). On the basis of recent experiences in several of its key businesses, including computers, printers, and medical products, successful CRM projects have concluded that this is indeed possible (Kaneshige 2001). The problem is that technology does not drive relations, and the importance of dialogue becomes more urgent for successful CRM. Technology is recasting the process of management, providing powerful new capabilities to help managers strategize and plan, organize, lead, and control. Technology implementation is one of the most complicated and important stages for any organization to react to changing environment and introduce new systems of customer relations. Organizations with successful strategic systems and CRM have broken down organizational barriers that block the sharing of data across functions (Freeland 2002). Design, sales, and manufacturing units must work together. The use of appropriate technology in properly planned systems can have positive effects on operations. KOLO takes a proactive approach to customers and internal processes. While management still tends to follow usual hierarchical and practical models, inhibiting internal, horizontal communication somewhat, many of these organizations have gotten closer to their buyers. Methods of doing this include criticism monitoring and handling through buyer service centers, segmentation of customers according to their needs, and more representative, thorough, and present measurements that track levels of company performance on key attributes and transactions. Some measurement tools also assess the importance of the attributes. The more progressive performance-based companies differentiate themselves by their approaches to organization built on higher emphasis, or focus, on customers. CRM structure tends to be flatter, and buyers are served on a local or departmental basis (Greenberg, 2004).
A marketing database is the key tool for making that happens. Nowhere is building share of mind, and in turn customer loyalty, more complex than in the environment. Multiply those parties by the many touch points in the life cycle of a sale—initial transaction, quality support, account management, and so forth—and the organization has got thousands of interactions that must be monitored and coordinated. This is why solidifying a strong buyer relationship often starts with sophisticated database investigation. In years past, KOLO followed industry tradition and relied on selling, where lone-ranger sales people negotiated sales, closed deals, and in the process shared little information with others in the company. In some cases, communication can involve six or more parties in a single endeavor. For KOLO must build effective customer relationships with those distributors and retailers that form the distribution channel to the ultimate customer (Kaneshige 2001).
KOLO has begun using CRM software to collect and track data about interaction with distributors buying their products. This data collection and tracking is paying off. KOLO has discovered that distributors buying a greater range of products typically recommend the KOLO brand over competitive brands. Because when it comes to products, distributors know that stores win a brand name over a single product (Greenberg, 2004). CRM efforts and selling incentives should be honed for distributors who buy multiple products of the same brand and not simply bulk orders of a single product. Furthermore, KOLO is working to constantly identify those distributors who most successfully sell bathroom furniture to distributors which in turn sell to the ultimate customer. For the bathroom furniture company, identifying these high-value distributors is a critical step in improving key relationships and thereby in maximizing brand loyalty throughout the distribution channel to the end consumer. Greenberg (2004) underlines that “many businesses realized they had not been actively managing their most important asset – their customers” (p. 34).
Getting this role right, and to a standard of expertise that is superior to that of competitors and sustainable in the longer term, requires an in-depth understanding of the nature and nuance of customer service. CRM and development influence profitability because they allow organizations build customer value by offering customers both a wider range of channels, and more personalized treatment through the integration of channels. Faced with increasing pressure from its customers for quicker order fulfillment, employees would be able to meet all requirements only following CRM principles and objectives.
- Freeland, J. 2002, The Ultimate CRM Handbook: Strategies and Concepts for Building Enduring Customer Loyalty and Profitability. McGraw-Hill1.
- Greenberg, P. 2004, CRM at the Speed of light, 3e. McGraw-Hill.
- Kaneshige, T. 2001, Surviving CRM.
- Newel, F. 2003, Why CRM doesn’t work. How to win by letting customers management the relationship. Cogan Page.
- Nicho, M. 2009, “Implementation Failures in Customer Relationship Management Software. Bulletin of Applied Computing and Information Technology 2.