Friday, November 20, 2009

Customer relationship management

A commonly cited definition of CRM

Customer Relationship Management is the establishment, development, maintenance and optimisation of long-term mutually valuable relationships between consumers and organisations.
CRM is a term that is often referred to in marketing. However, there is no complete agreement upon a single definition. This is because CRM can be considered from a number of perspectives. In summary, the three perspectives are:
1. CRM from the Information Technology Perspective.
From the technology perspective, companies often buy into software that will help to achieve their business goals. For many, CRM is far more than a new software package, the renaming of traditional customer services, or an IT-based customer management system to support sales people. However, IT is vital since it underpins CRM, and has the payoffs associated with modern technology, such as speed, ease of use, power and memory, and so on.
2. CRM from the Customer Life Cycle(CLC)Perspective.
The Customer Life Cycle (CLC) has obvious similarities with the Product Life Cycle (PLC). However, CLC focuses upon the creation of and delivery of lifetime value to the customer i.e. looks at the products of services that customers need throughout their lives. It is marketing orientated rather than product orientated. Essentially, CLC is a summary of the key stages in a customer's relationship with an organisation.
CRM from the business strategy perspective.
The Business Strategy perspective has most in common with many of the lessons and topics contained on this website, and indeed within the field of marketing itself. The diagram below shows the MarketingTeacher Model of CRM and Business Strategy. Our model contains three key phases - customer acquisition, customer retention and customer extention, and three contextual factors - marketing orientation, value creation and innovatove IT.