Customer Relationship Management

Knowledge Center





Realizing a customer intimacy strategy, fostering customer-satisfying behaviors and implementing customer-centric processes. Explanation of Customer Relationship Management.


Customer Relationship Management - overviewWhat is Customer Relationship Management? Description

Customer Relationship Management can be defined in a number of ways. Some people stress the significance of information technology in CRM, some argue it means a customer-centric organization, some believe CRM is a functional (marketing) strategy, others emphasize that CRM is primarily a business strategy. We agree with Peelen (Customer Relationship Management, 2006) that the definition by Gartner Group (2004) is attractive: CRM is an IT-enabled business strategy, the outcomes of which optimize profitability, revenue and customer satisfaction by organizing around customer segments, fostering customer-satisfying behaviors and implementing customer-centric processes.


CRM is a business strategy and is more than a functional strategy. It touches the organization as a whole: marketing, sales, IT, logistics, finance, production, R&D, HR, management, etcetera. If we thus define CRM, it is immediately clear that implementing full-size CRM is a daunting challenge.


Creating profitable and very efficient (client-facing) processes is not enough. For true Customer Relationship Management a customer intimacy strategy, a relation marketing philosophy rather than a transaction marketing philosophy, as well as a client-orientation of the whole organization are required.
 

Origin of Customer Relationship Management. History

The 1980s saw the emergence of Direct Marketing, heavily relying on client databases. Christan Grönroos and Evert Gummesson of the 'Nordic School' and Theodore Levitt deserve a special mentioning in this article. They were the first to describe Relation Marketing versus transaction marketing. Also they defined the characteristics of relation-centric organizations and they provided the corresponding marketing tools. In 1995, Treacy and Wiersema (1995) described their three Value Disciplines. Customer Intimacy was one of them. As a result, CRM transformed in the 1990s from a web based contact management and information tool, to a customer oriented strategy.


Usage of Customer Relationship Management. Applications

  • Companies that want to realize a customer intimacy strategy.
  • Companies that want to accomplish a customer friendly image.

Steps in Customer Relationship Management. Process

The following things make up the main elements to create a customer relation oriented organization:

  1. Strong customer-oriented leadership.
  2. The mission to be a relation-oriented organization aimed at long-term interaction.
  3. The corporate purpose is aimed at the customer.
  4. The main strategy is to win by customer intimacy.
  5. Company values and employee values focus on caring for customers.
  6. Behavioral standards reflect customer empathy and the wish to build long-term relationships and commitment.
  7. A relation-oriented organizational culture.
  8. An organization that is putting customer contacts in the center. Compare: Co-Creation, Business Process Reengineering.
  9. People: empathic communication skills, caring for customers.
  10. Systems that can help to connect and manage hard values with soft values, such as the Value Profit Chain and the Balanced Scorecard.

Strengths of Customer Relationship Management. Benefits

  • Strong relations with clients offer a degree of protection against actions of competitors.
  • Loyal customers can be more profitable. Winning new customers is expensive, satisfied customers may buy more, happy customers can bring additional customers, etc.

Limitations of Customer Relationship Management. Disadvantages

  • Implementing CRM in a holistic way is no sinecure.
  • Making large CRM investments profitable is difficult.
  • Achieving a Sustainable Competitive Advantage with CRM is even more difficult.

Assumptions of Customer Relationship Management. Conditions

  • If we are good to customers, they will be good to us.
  • Changing from the current strategic discipline towards a customer intimate discipline is possible.

Assessing client satisfaction levels

Two techniques to assess the actual level of customer happiness are the Customer Satisfaction Model and SERVQUAL for services companies.


Book: Ed Peelen - Customer Relationship Management -

Book: Heskett, Sasser and Schlesinger - The Service Profit Chain -


Special Interest Group - Customer Relationship Management CRM


Special Interest Group (1058 members)


Forum - Customer Relationship Management CRM  

Here you will find interesting and educational discussions.


  Why Customer Relationship Management? What Makes CRM Viable? (3 reactions)
What makes CRM a viable option is the cost dynamics ...
 
 
 
 
  CRM in University Set Up (2 reactions)
What kind of CRM tools are universities implementing?...
 
 
 
 
  Business Relations in Corporate America (4 reactions)
I dont think many people in business nowadays really know ho...
 
 
 
 
  The CRM-paradox by Nguyen
Recently, the CRM-paradox has been put forward by Nguyen, me...
 
 
 
 
  CRM in a Monopoly Situation (1 reactions)
Based on a personal on-going experience with a Belgian conso...
 
 
 
 
  Healthcare CRM Models? (1 reactions)
Hi, I'm looking for healthcare CRM frameworks or models. Wha...
 
 
 
 
  CRM in Military Organizations? (1 reactions)
Hi, is CRM used in military organizations? If yes, how do t...
 
 
 
 
  Stages of Customer Service Transformation
Marketing and managing customer relations are very important...
 
 
 
 
  6 Markets Model (Payne, 1995)
Hi, can someone explain the 6 markets model which is Interna...
 
 
 
 
  Start CRM with Fixing Fragmented Customer Service Processes (1 reactions)
I think advancing customer service for most firms starts wit...
 
 
 
 
  Customer Relationship Management as a Strategic Development Philosophy (6 reactions)
Customer Relationship Management is a term that not only des...
 
 
 
 
  Managing Customer Complaints (3 reactions)
How can CRM agents manage recurrent and repeat complaints fr...
 
 
 
 
  Relationship with Company or with Employees? (3 reactions)
Can a business customer relationship be said to exist betwee...
 
 
 
 
  Relationship Between Employee Retention and Customer Relationship Management (4 reactions)
In my opinion, retention of employees plays an important rol...
 
 
 
 
  CRM Practices in FMCG Sector (1 reactions)
Do FMCG companies engage in using CRM? If yes, how do they g...
 
 
 
 
  An Extreme CRM Case: Front Office (1 reactions)
A hotel guest makes a complaint at the front desk, stating: ...
 
 
 
 
  Increasing Student Retention using Higher Education CRM (1 reactions)
The student attrition problem has become a major concern for...
 
 
 
 
  Advanced Customer-Oriented Strategy: Customer Advocacy
The development of the Internet has resulted in more powe...
 
 
 
 
  Six Relationship Management Interaction Processes (Geersbro and Ritter) for International Relations
A business or organizational process refers to a series of c...
 
 
 
 
  Tool to assess CRM maturity? (3 reactions)
Hi, I am looking for a good tool to assess the level of CRM ...
 
 
 
 
  Customer Relationship Management Metaphor
CRM is like farming the field: Firstly you should own some ...
 
 
 
 
  More CRM Strengths / Benefits (2 reactions)
CRM also helps to generate additional revenue from the busin...
 
 
 
 
  Customer Relationship Management History (2 reactions)
I'm studying marketing and have been tasked with writing a h...
 
 
 
 
  CRM in Government (1 reactions)
How do you think can CRM be implemented in government sector...
 
 
 
 

Best Practices - Customer Relationship Management CRM

Here you will find the most valuable ideas.


  Framework for Monitoring Customer Service (9 reactions)
Dear all, please let me know what is an approproate framewor...
 
 
 
 
  CRM: What Forms a Strong Customer Relationship? (16 reactions)
Of course a vital relationship between customer and company ...
 
 
 
 
  What is the Impact of CRM on Organizational Performance? (7 reactions)
What is the impact of CRM on organisational performance? Wh...
 
 
 
 
  Rethinking Call Centers (4 reactions)
TRADITIONAL CUSTOMER SERVICE Experiences of callers with he...
 
 
 
 
  Theories of Customer Relationship Management (CRM) (9 reactions)
What are the main theories within customer relationship mana...
 
 
 
 
  Social Customer Relationship Management | Social CRM (10 reactions)
Because of the increasing popularity of social media technol...
 
 
 
 
  Customer Intimacy > WHY? (5 reactions)
Why there should be such an intimacy in the relationship wit...
 
 
 
 
  CRM in a Non-profit Context (1 reactions)
Besides using CRM in profit-oriented companies, CRM can also...
 
 
 
 

Expert Tips - Customer Relationship Management CRM

Here you will find high-quality advice from experts.


 

Common Reasons for Failure of CRM Initiatives

Implementation of CRM Initiatives...
 
 
 

Key Challenges of a CRM Implementation for Senior Managers

Implementing Customer Relationship Management...
 
 
 

3 Types of Customer Services

Understanding The Nature of Customer Services...
 
 
 

The New Consumer and CRM

Characteristics of the New Consumer...
 
 
 

What are the Main CRM Activities?

CRM Strategy, Activities...
 
 
 

A Closer Look Into Customer Value

Customer Value Analysis, Strategic Marketing, Innovation Strategy...
 
 
 

The Relationship Between Loyalty and Satisfaction

Customer Loyalty, Brand Loyalty, Customer Satisfaction, CRM...
 
 
 

Customer Centricity: Success Factors for Customer Intimacy

Value Disciplines, Customer Strategy, Customer Intimacy, Customer-oriented, CRM...
 
 
 

Implementing Customer Equity Management

Step-by-step Guide...
 
 
 

Customer Relationship TYPES

CRM, Relation Marketing, Branding...
 
 
 

CRM in Financial Services

Implementing CRM...
 
 
 

How to Build Customer-Centric Organizations

Holistic CRM...
 
 
 

The Customer Value Scorecard

Prioritizing CRM Opportunities...
 
 
 

How to Embed CRM Capabilites in CRM Activities?

CRM Strategy, CRM Capabilities...
 
 
 

The Actual Relationship Between Cross-buying and Consumer Loyalty

Customer Loyalty, Consumer Loyalty, Cross-Selling, Cross-Buying, Sales Management, Account Management...
 
 
 

Extreme Customer Trust as a Source of Competitive Advantage

Competitive Advantage, CRM, Customer Loyalty, Customer Intimacy...
 
 
 

Six Steps for Integrating Social Media Into your Organization

Social Media Integration, Using Social Media, Social Media for Business...
 
 

Resources - Customer Relationship Management CRM

Here you will find powerpoint presentations, micro-learning videos and further information sources.


Service Quality Models

SERVQUAL, Service Quality Management, CRM, CEM, Customer Loyalty, Customer Satisfaction...
 

The Impact of CRM on Financial Performance of Business

Building a Business Case for CRM...
 

The Costs of DISsatisfied Customers

Customer Satisfaction...
 

How to Deliver Exceptional Customer Service and Client Satisfaction

Customer Experience Management, Customer Satisfaction, Customer Service, CRM...
 

Customer Value Management

Organizational Management, Value Creation...
 

Practical Communication Tips for Managers

Management Skills, Leadership Skills, Management Development, Leadership Development, Situational Leadership...
 

Fundamental Customer Centricity

Understanding what Customer Centricity Really is About...
 

The 2 Worlds of Marketing and Sales

Making Sales and Marketing Work Together, Understanding the Differences...
 

The Importance of a Long Term Focus on the Customer

Interview Ohmae on the Need for a Long-term Customer Focus...
 

CRM Diagram

Customer Relationship Management...
 
 

News about Customer Relationship Management Method


     
 

News about Customer Relationship Management Approach


     
 

Videos about Customer Relationship Management Method


     
 

Videos about Customer Relationship Management Approach


     
 

Presentations about Customer Relationship Management Method


     
 

Presentations about Customer Relationship Management Approach


     
 

Books about Customer Relationship Management Method


     
 

Books about Customer Relationship Management Approach


     
 

More about Customer Relationship Management Method


     
 

More about Customer Relationship Management Approach


     

Compare with Customer Relationship Management: Relation Marketing  |  Value Disciplines  |  Multi Channel Marketing  |  Analytical CRM  |  Operational CRM  |  Customer Satisfaction Model  |  SERVQUAL  |  Co-Creation


Return to Management Hub: Communication & Skills  |  Marketing  |  Strategy


More Management Methods, Models and Theory

Special Interest Group Leader

You here? Sign up for free


 


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2019 12manage - The Executive Fast Track. V15.1 - Last updated: 21-8-2019. All names ™ of their owners.