CRM & investigation of new Strategies for Successful business

Customer Relationship Management  (CRM) & investigation of new Strategies for Successful business

1. Introduction

In any market, companies want to increase their rate of sales and quality of their services or products regularly to higher and higher points. Therefore, In Today’s business environment, it is almost impossible to unlink Customer Relationship Management (CRM) and success of the Business.

Many researches have done in order to see how CRM effective and important on the success of the business and which way. In fact, Drucker (1954), suggest, “The true business of every company is to make and keep customers” (Jain and Sharma, 2013, p 47.) which is one of the purposes of CRM. Some call it customer relationship management (CRM); others call it customer experience management (CRM), others call it customer-managed relationship (CRM) !
CRM is set of process usually linked to a database, which help an organization keep in contact with customers and deal with their requests, complaints, suggestion and purchase. (Smith and Zook, 2011).

2. Structure of Review

The review covers the definitions of customer relationship management (CRM) and how CRM has influences on a business environment. Further in this review, CRM Models are discussed critically. Finally
Thanks to the common feature of CRM Models, which is an importance of technology, discussion is carried further with the development of IT, and how development of IT helps to involve of e-CRM and enlighten the Social CRM.

3. Definitions of CRM

CRM is ‘a process that addresses all the aspects of identifying customers, creating customer knowledge, building customer relationship, and shaping their perceptions of the organization and it’s product (Pleen, 2005). CRM is the core business strategy that integrates internal process, and functions and external networks to create and deliver value to targeted customers at a profit. It is grounded on high quality customer-related data and enabled by information technologies (Buttle, 2009).
However it’s defined, understanding customers, and their expectation and offering them pre-searched valuable service or products can be the key points of CRM for successful business among competitors. “Nurturing excellent customer relationship builds this defensive wall around a business that most competitors struggle to break down” (Smith and Zook, 2011).


It is inevitable that, companies or entrepreneurs need to develop their own CRM strategies. Literately, there are five models developed that can be helpful for companies to collaborate with them to build operational excellence, product leadership and customer intimacy (Treacy and Wiersema, 1996).

4.1. The IDIC Model

Figure1: The IDIC Methodology. (Pepper and Rogers. 2004).
Peppers and Rogers (2004) established one of the most significant strategic Models for CRM, which was called as IDIC, in 2004. It consists of four operational steps. To Identify; customers and develop intensive understanding, differentiate customers who are more futuristic interact with customers in order to understand customer expectations and their approaches to competitors, customize services and product range to answer their prospects: to build closer one to one relationship with customers (Buttle, 2009)

4.2. The QCi Customer Management Model

The QCi Customer Management Model is another CRM strategy model focus more on costumers rather than CRM process, which show ways to companies in order not to lose customers. QCi points out Customer management by dividing into three significant factors: Acquisition, Retention, Penetration in each of categories has sub stages that gives organizations implementation strategy and shows ways in order not to lose customers.

4.3. Payne’s Five-Process Model

The purpose of CRM is to efficiently and effectively increase the acquisition and retention of profitable customers by selectively initiating, building and maintaining appropriate relationships with them (Payne and Frow, 2006).  According to the Figure 3, in Payne’s Model CRM process divided into five main and sub process that includes strategy development process, value creation process, multichannel integration process which is also known as operational CRM, performance assessment process, as last, information management process or analytical CRM.

1. Customer Relationship Management (CRM) Learning Objectives Define CRM;

Understand the importance of CRM; Explain the determinants of CRM and the key stages in its development; Discuss the main functions and various models of CRM; Explain the role of salespeople as relationship developers Discuss the management of customer relationships.

2. Customer Relationship Management (CRM) What is Customer Relationship Management (CRM)?

CRM is “the development and maintenance of mutually beneficial long-term relationships with strategically significant customers ” (Buttle, 2000) CRM is “an IT enhanced value process , which identifies, develops, integrates and focuses the various competencies of the firm to the ‘ voice’ of the customer in order to deliver long-term superior customer value , at a profit to well identified existing and potential customers ”. (Plakoyiannaki and Tzokas, 2001)

3. Customer Relationship Management (CRM) Understanding Customer Relationship Management (CRM)?

CRM is a business philosophy based on upon individual customers and customised products and services supported by open lines of communication and feedback from the participating firms that mutually benefit both buying and selling organisations . The buying and selling firms enter into a “learning relationship ”, with the customer being willing to collaborate with the seller and grow as a loyal customer . In return,, the seller works to maximize the value of the relationship for the customer’s benefit . In short, CRM provides selling organisations with the platform to obtain a competitive advantage by embracing customer needs and building value-driven long-term relationships .

4. Customer Relationship Management (CRM) Determinants of CRM

Trust The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the other company as agreed upon implicitly and explicitly. Value The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms.

5. Customer Relationship Management (CRM) Determinants of CRM In addition to trust and value , salespeople must :

Understand customer needs and problems; Meet their commitments; Provide superior after sales support; Make sure that the customer is always told the truth (must be honest); and Have a passionate interest in establishing and retaining a long- term relationship (e.g., have long-term perspective).

6. Customer Relationship Management (CRM) Stages in the development of a Customer Relationship The Pre-relationship Stage

The event that triggers a buyer to seek a new business partner. The Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The Development Stage Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The Long-term Stage Characterised by the companies’ mutual importance to each other. The Final Stage The interaction between the companies becomes institutionalized.

7. Customer Relationship Management (CRM) Stages in the Development of a Key-Account Relationship Degree of involvement High Low Nature of customer relationship Transactional Collaborative Pre-KAM Early-KAM Mid-KAM Partnership Synergistic KAM (Millman and Wilson, 1995)

8. Customer Relationship Management (CRM) A Relationship Life Cycle Model High cooperation Low competition Low cooperation High competition Time Pre- relationship stage Development stage Maturity stage Decline stage (Wilkinson and Young, 1997)

9. Customer Relationship Management (CRM) Class Exercise What should the focus and main activities of a global salesperson be in each stage of the relationship development process? Why? (Please justify your answer)

10. Customer Relationship Management (CRM) Functions of Customer Relationship Management

Direct functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout: and Access

11. Customer Relationship Management (CRM) Functions of Customer Relationship Management

Customer sensitivity
Value Creation Process
Technology delivery process
Technology integration
Efficiency, effectiveness
Product delivery process
Concept to launch
Manufacturing process
Customer delivery process
Supply chain
Infomediation (distribution
of information)
(Sharma et. al., 2001)

12. Customer Relationship Management (CRM) The role of salespeople as relationship builders and promoters Salespeople by: identifying potential customers and their needs; approaching key decision makers in the buying firm; negotiating and advancing dialogue and mutual trust; coordinating the cooperation between the customers and their company; encouraging the inter-organisational learning process; contributing to constructive resolution of existing conflicts; and leading the customer relationship development team are the individuals in any organisation who act both as relationship builders and as relationship promoters.

13. Customer Relationship Management (CRM) Models of Customer Relationship Management The Evans and Luskin (1994) model for effective Relationship Marketing
Relationship marketing inputs
Understanding customer expectations
Building service partnerships
Empowering employees
Total quality management
Relationship marketing outcomes
Customer Satisfaction
Customer loyalty
Quality products
Increased profitability
Assessment state
Customer feedback
(Evans and Luskin, 1994)

14. Customer Relationship Management (CRM) Models of Customer Relationship Management The Brock and Barcklay (1999) model of selling partner relationship effectiveness Independence Relative influence Mutual trust Cooperation Selling partner relationship effectiveness

15. Customer Relationship Management (CRM) Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate , develop and enhance the process that is aimed at building trust and commitment with the customer. Initiating the relationship Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying influences; Plan the initial sales call; Demonstrate an understanding of the customer’s needs; Identify opportunities to build a relationship; and Illustrate the value of a relationship with the customer

16. Customer Relationship Management (CRM) Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customer’s needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment.

17. Customer Relationship Management (CRM) Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Enhancing the relationship Assess customer satisfaction; Take action to ensure satisfaction; Maintain open, two-way communication; and Work to add value and enhance mutual opportunities.

18. Customer Relationship Management (CRM) Managing Customer Relationships Qualifying prospects for relationship building Opportunities for adding value Potential profitability of customer High Low Low High Use a non customized approach Seek better opportunities elsewhere Build a strong and lasting relationship Focus on loyalty-building program

19. Customer Relationship Management (CRM) Relationship networks The ultimate outcome of a successful CRM strategy is the creation of a unique company asset known as a relationship network. A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships. The additional aspects of a global salesperson’s job are to: Manage customer value; Act as customer advocate; and Enhance customer loyalty and build a “health” and profitable network of relationships.

20. Customer Relationship Management (CRM)

Summary CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value to customers in an effort to turn prospects into customers, customers into loyal customers, and loyal customers into partners.


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