customer relationship and focus management
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` Process of creating and maintainingrelationships with business customers orconsumers
`
A holistic process of identifying, attracting,differentiating, and retaining customers` Integrating the firms value chain to create
enhanced customer value at every step`
An integrated cross-functional focus onimproving customer retention and profitabilityfor the company.
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CRM is concerned with the creation,development and enhancement of
individualised customer relationships with
carefully targeted customers and customer
groups resulting in maximizing their totalcustomer life-time value .
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` The focus [of CRM] is on creating value forthe customer and the company over thelonger term .
` When customers value the customer servicethat they receive from suppliers, they are lesslikely to look to alternative suppliers for theirneeds .
`
CRM enables organisations to gaincompetitive advantage over competitorsthat supply similar products or services .
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` Todays businesses compete with multi-product offerings created and delivered bynetworks, alliances and partnerships of many
kinds. Both retaining customers and buildingrelationships with other value-adding allies iscritical to corporate performance .
` The adoption of C.R.M. is being fuelled by a
recognition that long-term relationships withcustomers are one of the most important assetsof an organisation .
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CRM involves the following :
` 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.
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Link all processes of the company from itscustomers through its suppliers
Foster customer-satisfying behaviors
Encourage and track customerinteraction
with the company
Organize the company aroundcustomer segments
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` 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 ofuncertainty and distance exists.
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` The Development StageIncreased levels of transactions lead to ahigher degree of commitment andthe distanceis reduced to a social exchange.
` The Long-term StageCharacterised by the companies mutualimportance to each other.
` The Final StageThe interaction between the companiesbecomes institutionalized
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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)
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` Identifying prospects
` Acquiring customers
` Developing customer
` Cross-selling and up-selling` Managing migration
` Servicing
` Retaining` Increasing loyalty
` Winning back defectors
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` Technology plays a pivotal role in CRM.` Technological approaches involving the use of
databases, data mining and one-to-one
marketing can assist organisations to increasecustomer value and their own profitability
` This type of technology can be used to keep arecord of customers names and contact details
in addition to their history of buying productsor using services
` This information can be used to targetcustomers in a personalised way and offer
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Here are examples of how technology can be used to createpersonalised services to increase loyaltyin customers:
` Phone calls, emails, mobile phone text messages, or WAPservices (2):
Having access to customers contact details and their service orpurchase preferences through databases etc can enableorganisations to alert customers to new, similar or alternativeservices or products
- Illustration: When tickets are purchased online viaLastminute.com, the website retains the customers details and
their purchase history.The website regularly send emails toprevious customers to inform them of similar upcoming eventsor special discounts.This helps to ensure that customers willcontinue to purchase tickets from Lastminute.com in the future.
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` Reduced costs, because the right things arebeing done (ie., effective and efficientoperation) .
` increased customer satisfaction, because theyare getting exactly what they want (ie. meetingand exceeding expectations) .
` ensuring that the focus of the organisation isexternal.
` growth in numbers of customers .` increased access to a source of market and
competitor information .` highlighting poor operational processes .` long term profitability and sustainability .
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