Whats Customer Relationship Management (CRM)?


To start with, relationship marketing includes activities undertaken to improve the relations and interactions between an organization and its customers for long-term rewards and profitability. CRM is an abbreviation for Customer Relationship Management. CMR is important because it aids in marketing and applies Information and Technology in achieving their tasks and objectives. Customer Relationship Management can therefore be said to be the activity of identifying the most profitable customers, attracting and retaining them through building good relationships with them. CMR uses the existing information about their customers to improve the services they offer them, and also their profitability. It can be viewed as more of a personal (one-on-one) marketing of products, whereby a consumer’s need is personally attended to.

Customer Relationship management

On the other hand, relationship management is the activities undertaken in maintaining customers, acquiring new ones, analyzing and organizing the information collected from them that is useful to the organization in providing better goods and services to their clients. Relationship management involves cultivating and maintaining the existing relationship there is between the customer and the organization. Relationship management ensures that there are no threats to the relationship that has recently been acquired between the customer and an organization.

From the text, there is a clear difference between customer relationship marketing and relationship management, because while relationship marketing seeks to use the information they have about the customer to provide customers with the best services hence building a good one-on-one relationship with them, customer relationship management seeks to maintain these relationships that have already been established.

In CRM there is an emphasis on having one view of the customer. This means having a defined way of looking at the customer, so as to provide the best services, that is, from the consumer of products’ perspective for example. This is important because it helps the company to know how best to build, maintain relationships and satisfy the customer’s needs. Organizations can use technology to achieve this by recording and storing consumers’ purchases in databases. This data will help in analyzing their buying behavior and thus help them in decision-making.

A conceptual framework for CRM adoption

According to Ryal and Payne, the CRM adoption process goes through 5 defined stages. First, pre-planning or CRM, and is where a company recognizes the importance of CRM. Secondly, a data base warehouse is then developed, that seeks a way to store data. The third level is the moderately developed organizations, and these have fully developed warehouses of data storage. At this point, the organization focuses on the customer’s profitability towards the organization. The fourth level is the well-advanced stage characterized by well-developed data storage systems and mainly uses electronic data storage applications for data storage. The fifth level is the ‘best in class organizations, and these are characterized by fully effective data ware houses that feed back accurate data.

Examples of good customer relationship management are when the customer is well attended to at a personal level, and secondly when sufficient data is collected and safely stored in a good data warehouse. Examples of bad customer relationship management are when a customer doesn’t feel appreciated by the company and when there is no effective system to store data about the company’s customers.

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