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Strategic
Issues
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SEEKING
CUSTOMERS AND KEEPING CUSTOMERS: THE CONCEPT OF CRM
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Customer
Relationship Management (CRM) has today become a topical
area of interest especially with the onset of e-commerce.
As CRM is a term used in a broad manner, there is probably
a need for the marketing practitioner to understand
what it is, its impact on the organisation (not just
on the marketing aspects), its applicability to an organisation
and its benefits to customers. There is a need to understand
that CRM is an overall strategy for the organisation
and not just a sales tool with a short-term orientation.
CRM requires a long-term plan, and anything long-term
requires a strong organisational commitment and appropriate
investment. |
CRM
as a concept is as old as marketing itself. Firms in
both consumer and business-to-business marketing have
always (either by accident or design) made attempts
to encourage repeat buying from regular and frequent
consumers. A common consumer would have realised and
experienced this aspect of CRM (though in a very indirect
form) from grocery shops to large outlets. What has
been added to this kind of CRM is the collaborative
and cooperative aspects from the consumer’s end in the
present-day context. This kind of collaborative effort
could assume either complex forms as in business-to-
business marketing (with different buying influences)
or it could just involve the consumer using a credit
card sharing his personal (demographic and psychographic)
information with the marketer. The CRM structure for
business-to-business marketing may be different from
the one which is required for consumer marketing.
The Concept of CRM
CRM is a relationship process which a company can cultivate
with its customer groups/segments in such a way that
it would benefit both the customer and the company.
The pre-requisites of any CRM programme are:
A willingness from both the company and the customer
to stay committed to the relationship which is based
on mutual benefits. This is required because organisational
process changes may have to be initiated in both organisations
and hence top management has to be convinced about CRM
in both the companies (in case of business-to-business
marketing context).
A ‘non-transactional’ orientation on the part of the
marketer. A transaction is a ‘one-off’ interaction and
hence CRM involves a combination of strategies which
build up the relationship between the marketer and customer
over a period of time (though transaction-based loyalty
programs could be formulated).
A willingness on the part of the marketer to invest
in an infrastructure that can implement and operationalise
CRM. The infrastructure could include web-based hardware/software
which could effectively harness the advantages of CRM.
CRM is not:
having just a call-centre without appropriate strategies
l having just a database of consumers for sending direct
mail l establishing just a social relationship with
the consumer l having an eternal price discount procedure.
CRM and its linkages
It should be noted that any CRM programme should be
associated with loyalty and customer satisfaction aspects.
These two aspects point out to the fact . |
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