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Index topic Definition crm Why crm ELEMENTS OF CRM PROCESS Type of crm solution Implementation of crm solution ROLE OF MARKETING IN CRM CUSTOMER LIFE CYCLE E-CRM Goals of crm Impact of crm in india Page no. Potential drawback of crm CRM Background The perception of the value and need of 'Relationship Marketing' as well as its importance in Business have repeatedly been identified in Applied IT research literature during the past decade (Bagozzi, 1995; Cannon et al., 1999; Dwyer et al.,
Transcript topic Page no.Definition crmWhy crmELEMENTS OF CRM PROCESSType of crm solutionImplementation of crm solutionROLE OF MARKETING IN CRMCUSTOMER LIFE CYCLEE-CRMGoals of crmImpact of crm in indiaPotential drawback of crm  CRM BackgroundThe perception of the value and need of 'Relationship Marketing' as well as its importance in Business have repeatedly been identified in Applied IT research literature during the pastdecade (Bagozzi, 1995; Cannon et al., 1999; Dwyer et al., 1987; Peterson, 1995; Sheth et al.,1995). The building of long term relationships with customers provides multiple benefits to businesses is also an established fact (Dwyer et al., 1987). Similarly, the retaining of existingcustomers is rightly considered to be more profitable than the acquiring of new ones. Also, rapidadvances in technology have helped immensely in the managing, serving and retaining of customers better and with greater ease. In this current environment of better 'Customer Relationship Management', ³(CRM) is a healthy and promising newcomer which has appearedon the business radar´ (Greenberg, 2002, p.2).Customer Relationship Management is a comprehensive strategy and process of acquiring,retaining, and partnering with selective customers to create superior value for the company andthe customer. It involves the integration of marketing, sales, customer service, and thesupplychain functions of the organization to achieve greater efficiencies and effectiveness indeliveringcustomer value.CRM is an approach to the better, faster and more effective organizing of any business'interactions with their customers based on a customer-centric foundation. It is an entirediscipline, not a single activity or project. Customer relationship management allows businessesto execute relationship marketing at an enterprise-wide level (Winer, 2001). The building of sustainable successful relationships with a large customer base with CRM is not an easy task  because CRM has a direct impact on many core business operations, especially on the processestherein. The issue here is not exclusively a technical one. It is not only about softwareimplementation. And it is not about sales either. It is more about the resulting interaction of entire business processes with customers. CRM is about creating a competitive advantage by being the best at understanding, communicating, delivering service and developing existingcustomer relationships in addition to the creating and keeping of new customers.Before we begin to examine the conceptual foundations of CRM, defining what CRM is would be useful. In the marketing literature the terms customer relationship managementandrelationship marketing are used interchangeably. As Nevin (1995) points out, these termshave been used to reflect a variety of themes and perspectives. Some of these themes offer anarrow functional marketing perspective while others offer a perspective that is broad andsomewhat paradigmatic in approach and orientation. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked todatabase efforts (Bickert, 1992).Another narrow, yet relevant, viewpoint is to consider CRM only as seeking customer retention by using a variety of after marketing tactics that lead to customer bonding or staying in touchwith the customer after a sale is made (Vavra, 1992). A more popular approach with the recentapplication of information technology is to focus on individual or one-to-one relationships withcustomers that integrate database knowledge with a longterm customer retention and growthstrategy (Peppers & Rogers, 1993).There are several ways in which CRM can be described simply because, in action, CRM meansdifferent things to different organizations. To best address CRM from a holistic viewpoint, thefollowing definition is likely to be the most appropriate for the purpose of the current research:³Customer relationship management (CRM) is a business strategy to select and manage valuable  customer relationships. CRM requires a customer-centric business philosophy and culture tosupport effective marketing, sales and service processes. CRM applications can enable effectivecustomer relationship management, provided that an enterprise has the right leadership, strategyand culture.´ (Thompson, 2001, (1991) has professed a more strategic view by putting the customer first and shiftingthe role of marketing from manipulating the customer (telling and selling) to genuineinvolvement with the customer (communicating and sharing knowledge). Berry (1995), insomewhat broader terms, also has a strategic viewpoint concerned with CRM. He has stressedthat attracting new customers should be viewed only as an intermediate step in the marketing process and that developing closer relationship with these customers and turning them into loyalones should be equally important aspects of marketing. Thus, he proposed that relationshipmarketing be seen as ³attracting, maintaining, and ± in multi-service organizations ± enhancingcustomer relationships´. Berry¶s notion of customer relationship management resembles that of other scholars studying services marketing, such as Gronroos (1990), Gummesson (1987), andLevitt (1983). Although each one of them has espoused the value of interactions in marketingand its consequent impact on customer relationships, Gronroos and Gummesson take a broader  perspective and advocate that relationships with customers be the focus and dominant paradigmof marketing. For example, Gronroos (1990) states: ³Marketing is to establish, maintain, andenhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfillment of promises´.The implication of Gronroos¶ definition is that forming relationships with customers is the raison de etre of the firm and marketing should be devoted to building and enhancing suchrelationships. Similarly, Morgan and Hunt (1994) draw upon the distinction made betweentransactional exchanges and relational exchanges by Dwyer, Schurr, and Oh (1987) to suggestthat relationship marketing ³refers to all marketing activities directed toward establishing,developing, and maintaining successful relationships.´The core theme of all CRM and relationship marketing perspectives is its focus on a cooperativeand collaborative relationship between the firm and its customers, and/or other marketing actors.Dwyer, Schurr, and Oh (1987) have characterized such cooperative relationships as beinginterdependent and long-term orientated rather than being concerned with short-term discretetransactions. The long-term orientation is often emphasized because it is believed that marketingactors will not engage in opportunistic behavior if they have a long-term orientation and thatsuch relationships will be anchored in mutual gains and cooperation (Ganesan, 1994).Another important facet of CRM is ³customer selectivity.´ As several research studies haveshown, not all customers are equally profitable for an individual company (Storbacka, 2000).The company therefore must be selective in tailoring its program and marketing efforts bysegmenting and selecting appropriate customers for individual marketing programs. In somecases, the ³outsourcing of some customers´ could be called for so that a company allocates itsresources to those customers it can serve the best in order to create mutual value. However, theobjective of a company is not really to prune its customer base but to identify the programs andmethods that would be the most profitable as it creates value for the firm and the customer.    . Improving customer serviceCRMs are claimed to improve customer service. Proponents say they can improve customer service by facilitating communication in several ways:  Provide product information, product use information, and technical assistanceon web sites that are accessible 24*7.  Help to identify potential problems quickly, before they occur.  Provide a user-friendly mechanism for registering customer complaints(Complaints that are not registered with the company cannot be resolved, andare a major source of customer dissatisfaction).  Provide a fast mechanism for handling problems and complaints (complaintsthat are resolved quickly can increase customer satisfaction).  Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction)  Identify how each individual customer defines quality, and then design aservice strategy for each customer based on there individual requirements andexpectations.  Provide a fast mechanism for managing and scheduling follow-up sales calls toassess post-purchase cognitive dissonance, repurchase probabilities,repurchase times, and repurchase frequencies.  Provide a mechanism to track all points of contact between a customer and thecompany, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of thecustomer (reduces confusion).The CRM can be integrated into other cross-functional systems and thereby provide accountingand production information to customers when they want itPage 10 of 29Improving customer relationshipsCRMs are also claimed to be able to improve customer relationships . Proponents say this can bedone by:  CRM technology can track customer interests, needs, and buying habits asthey progress through their life cycles, and tailor the marketing effort accordingly.This way customer get exactly what they want as they change.  The technology can track customer product use as the product progresses through itslife cycle, and tailor the service strategy accordingly. This way customer gets whatthey need as the product ages.When any of the technology driven improvements in customer service contribute to long-termcustomer satisfaction, they can ensure repeat purchases, improve customer relationships, increasecustomer loyalty, decrease customer turnover, decrease marketing costs (associated withcustomer acquisition and customer training), increase sales revenue, and thereby increase profitmargins. New Customer Management Tools For Higher IQ and Peak Business Results.To create a sustainable competitive advantage through CRM or customer management andmarketing processes, a business must master leading-edge intelligence tools that raise its
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