AllBestEssays.com - All Best Essays, Term Papers and Book Report
Search

Customer Relationship Management

Essay by   •  March 10, 2013  •  Term Paper  •  1,919 Words (8 Pages)  •  1,224 Views

Essay Preview: Customer Relationship Management

Report this essay
Page 1 of 8

Marketing management assignment

DT360/2

1. Review of literature sources

The first literature source I have reviewed is 'Business Marketing Management:B2B' tenth edition by Michael D.Hutt and Thomas W.Speh.

This literature defines CRM as "a cross functional process for achieving a continuing dialogue with customers across all their contact and access points with personalised treatment of the most valuable customers to ensure customer retention and the effectiveness of marketing initiatives".

Marketing firms large and small are making substantial investments in CRM systems however, to get positive returns from CRM software the firm must first implement a customer strategy.

Daniel Rigby says "CRM is the bundling of customer strategy and processes, supported by relevant software for the purpose of improving customer loyalty and eventually corporate profitability"

In developing a profitable customer strategy, the areas to be considered are;

1. Acquiring the right customers

This can be done by identifying your most valuable customers and calculating your share of their purchases for your goods and services. We then use CRM technology to

* Analyse customer revenue and cost data to identify current and future high-value customers.

* Target marketing communications to high-value customers.

2. Crafting the right value proposition

Determine the products or services your customers need today and will need tomorrow, and assess the products the products or services that your competitors offer today and tomorrow. Following that you should identify new products or services that you should be offering.

We then use CRM technology to

* Capture relevant product and service behaviours data from customer transactions

* Create new distribution channels

* Develop new pricing models

3. Instituting the best processes

Research the best way to deliver your products or services to customers. Determine the service capabilities that must be developed and the technology investments that are required to implement customer strategy. CRM technology then better enables you to

* Process transactions faster

* Provide better information to customer contact employees

* Manage logistics and the supply chain more efficiently

4. Motivating employees

Identify the tools your employees need to foster customer relationships.

Earn employee loyalty by investing in training and development and constructing appropriate career paths for employees. CRM technology can then be used to

* Align employee incentives and performance measures

* Distribute customer knowledge to employees throughout the organisation.

5. Learning to retain customers

Understand how customers defect and how to win them back, and identify strategies your competitors are using to win your high-value customers. You can then use CRM technology to

* Track customer defection and retention levels

* Track customer service satisfaction levels

The second literature source I have reviewed is 'Marketing concepts and strategies' 6th edition, by Dibb, Simkin, Pride, and Ferrell.

Having divided a market into segments a company must decide which segments should be pursued as priorities in terms of its marketing strategies and budget allocation. Once a company has determined its target markets, it should strive to exploit relationships with its customers in these segments. CRM is the term used to describe the processes for managing such relationships with the aim of maintaining the interest and support of the most worthwhile and valuable customers. Technology enables such approaches and today most companies operate some form of a CRM system. CRM aims to increase profitability by identifying the best customers within targeted segments, developing on-going relationships and satisfying their needs in order to encourage these customers to remain loyal and to keep returning. The aim is to enhance the life time value to the company of a particular customer. CRM provides a framework for achieving coordination between marketing, customer service and quality programmes. Essential elements for effective CRM include

* A focus on customer needs

* Interaction, on-going dialogue and transparent communication

* Learning relationships and customer involvement

* Customisation, personalisation, individualisation one-to-one

* Adoption of technological advancements and applications

* Monitoring, tracking the use of data and ability to make sense of information

* Use of customer data bases and CRM tools

* Ability to create value added through positive experiences

* Understanding buyer-seller relationships which involve the psychology of trust, commitment, satisfaction, symmetry, dependence, fairness and morality.

In essence, CRM helps a business to recognise the value of its customers and to capitalise on improved customer relations. The better you understand your customers, the more responsive you can be to their needs.

CRM can be achieved by:

* Finding out about customers purchasing habits, opinions and preferences

* Profiling individuals and groups so as to market more effectively and increase sales

* Changing the way a company operates, to improve customer service and marketing.

There are many IT solutions to CRM available. Many software companies offer CRM applications that integrate with existing customer data and sales management packages. While not tailored to a company's unique customer base, product portfolio

...

...

Download as:   txt (12.8 Kb)   pdf (150.3 Kb)   docx (14.6 Kb)  
Continue for 7 more pages »
Only available on AllBestEssays.com
Citation Generator

(2013, 03). Customer Relationship Management. AllBestEssays.com. Retrieved 03, 2013, from https://www.allbestessays.com/essay/Customer-Relationship-Management/43767.html

"Customer Relationship Management" AllBestEssays.com. 03 2013. 2013. 03 2013 <https://www.allbestessays.com/essay/Customer-Relationship-Management/43767.html>.

"Customer Relationship Management." AllBestEssays.com. AllBestEssays.com, 03 2013. Web. 03 2013. <https://www.allbestessays.com/essay/Customer-Relationship-Management/43767.html>.

"Customer Relationship Management." AllBestEssays.com. 03, 2013. Accessed 03, 2013. https://www.allbestessays.com/essay/Customer-Relationship-Management/43767.html.