What is CRM?

• CRM “is a business strategy that aims to understand, anticipate and manage the needs of an organisation’s current and potential customers”
• It is a “comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology”
• CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers
• “The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM)”

"CRM is concerned with the creation, development and enhancement of individualized customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value"

The Purpose:

• “The focus is on creating value for the customer 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 needs
• CRM enables organisations to gain ‘competitive advantage’ over competitors that supply similar products or service

Importance:

• “Today’s businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Both retaining customers and building relationships with other value-adding allies is critical to corporate performance”
• “The adoption of C.R.M. is being fuelled by a recognition that long-term relationships with customers are one of the most important assets of an organisation”

What does CRM involve?

• Organisations must become customer focused
• Organisations must be prepared to adapt so that it take customer needs into account and delivers them
• Market research must be undertaken to assess customer needs and satisfaction

“Strategically significant customers”

• “Customer relationship management focuses on strategically significant markets. Not all customers are equally important”
• Therefore, relationships should be built with customers that are likely to provide value for services
• Building relationships with customers that will provide little value could result in a loss of time, staff and financial resources

Benefits :

• Reduced costs, because the right things are being done (ie., effective and efficient operation)
• Increased customer satisfaction, because they are getting exactly what they want (ie. meeting and exceeding expectations)
• Ensuring that the focus of the organisation is external
• Growth in numbers of customers
• Maximisation of opportunities (eg. increased services, referrals, etc.)
• Increased access to a source of market and competitor information
• Highlighting poor operational processes
• Long term profitability and sustainability