As a logical result of the appearance of the concept "Relationship Marketing" since the 1920s, the concept "Customer Relationship Management" (CRM) has been brought to attention in late nineties, especially among the academics and practitioners,. The new concept has directed the attention towards various vital aspects, including the necessity of direct relationship between customers and marketers, the importance of keeping current customers, as well as the inevitability of building long-term relationships with customers instead of the customer-oriented transaction method in order to augment the profitability of the institutions, especially in today 's increasingly competitive economy.Therefore, the organizations have directed their attention
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In literature, many definitions have been given to describe CRM. Lacking a widely accepted definition,CRM is the business strategy, process, and Information Technology (IT) that enable a company to optimize revenue and increase value through understanding and satisfying the individual customer’s needs. Bose described CRM as an essential and vital function of customer oriented marketing responsible for gathering and accumulating related information about customers in order to provide effective services. CRM is also explained as a combination of business process and technology that seeks to understand a company’s customers from the perspective of who they are, what they do, and what they are like. CRM can be defined as “the development and maintenance of mutually beneficial long-term relationships with strategically significant …show more content…
CRM therefore manages the customer relationships by creating a clear understanding of the market (Know), by developing services and products based on the added value for target groups (Target), then enabling the actual sale and delivery of services and products via a portfolio of channels (Sell) and finally developing long-term profitable relationships with after sales services (Service). The relationship is developed with strategically significant customers, and hence necessary for the organization to determine the nature of this significance. Traditionally, this has been done by determining the value of the customer to the organization, but other criteria that can be used include whether a customer serves as a benchmark for other customers or whether the customer inspires change in the supplier. However, under certain circumstances CRM may result in the termination of relationships. It has not worked out that well in practice as many large companies sometimes spend huge amounts of money on CRM systems only to find disappointing results. Most CRM projects are highly fragmented, lack customer focus, and then fail to meet their objectives. CRM, in practice, involves the purchase of hardware and software that will enable a company to capture detailed information about individual customers that can be used for better target marketing. By examining a customer’s past purchases, demographics, and
In literature, many definitions have been given to describe CRM. Lacking a widely accepted definition,CRM is the business strategy, process, and Information Technology (IT) that enable a company to optimize revenue and increase value through understanding and satisfying the individual customer’s needs. Bose described CRM as an essential and vital function of customer oriented marketing responsible for gathering and accumulating related information about customers in order to provide effective services. CRM is also explained as a combination of business process and technology that seeks to understand a company’s customers from the perspective of who they are, what they do, and what they are like. CRM can be defined as “the development and maintenance of mutually beneficial long-term relationships with strategically significant …show more content…
CRM therefore manages the customer relationships by creating a clear understanding of the market (Know), by developing services and products based on the added value for target groups (Target), then enabling the actual sale and delivery of services and products via a portfolio of channels (Sell) and finally developing long-term profitable relationships with after sales services (Service). The relationship is developed with strategically significant customers, and hence necessary for the organization to determine the nature of this significance. Traditionally, this has been done by determining the value of the customer to the organization, but other criteria that can be used include whether a customer serves as a benchmark for other customers or whether the customer inspires change in the supplier. However, under certain circumstances CRM may result in the termination of relationships. It has not worked out that well in practice as many large companies sometimes spend huge amounts of money on CRM systems only to find disappointing results. Most CRM projects are highly fragmented, lack customer focus, and then fail to meet their objectives. CRM, in practice, involves the purchase of hardware and software that will enable a company to capture detailed information about individual customers that can be used for better target marketing. By examining a customer’s past purchases, demographics, and