1.0 CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

One of the key activities that marketers should understand is how to effectively manage positive relationships with customers. Firms focus on CRM to have quality relationships with customers. CRM consists of the firm’s activities to build, retain, and sustain long-term relationships with customers, whereby it tries to improve profitability in the long run. To have an effective CRM system, the first task for the firm is to maximize the collection of customer information. Internet and information technology enable the firm to easily target specific customers, learn about their unique needs, analyze their behavior, and provide the best value to them. An effective CRM mainly depends on technologies based on advanced databases and analytical tools to analyze customer data and provide better products or services. For example, data mining, which is involved in specialized statistical software programs, allows a firm to uncover and predict customer behavior and purchase patterns. The firm can then tailor its marketing strategies to meet the customers’ specific needs. Web sites or call centers are also example of CRM systems that are used to support customer services, whereby the firm manages positive relationships with customers.

Although sophisticated statistical analytic software and information technologies play a critical role in the success of CRM implementation, it is not just the software or technologies that drive the building, maintaining, and sustaining of customer relationships. CRM means more than harnessing a technology based customer database. CRM is the overall firm commitment to the development of proactive customer relationship strategies that are combined with other business strategies. The purpose of CRM is to provide satisfaction for customers. CRM is more than the simple reduction of marketing costs and more efficient interactions with customers; it is the building of a long-lasting customer centric orientation within the firm (Cheryl, 2007).

Customer relationship management (CRM) refers to business processes executed by a company and with its business partners to service customers and sustain relationships with them.