The paper "Customer Relationship Management for a Higher Level of Customer Service" Is a great example of a Management Case Study. Customer Relationship Management, or CRM, is the management of a number of objectives that have the two important goals of acquiring and retaining customers. In order to accomplish those goals, businesses must understand their customers’ wants and needs so that customer service and other processes can be designed to serve them effectively. This improves customer satisfaction but also helps to increase productivity, reduce operating costs, and improve profitability for the business.
(Gollan, 2005) By using customer relationship management to develop processes and procedures to maximize every customer interaction, businesses can maintain a competitive advantage. (Jan 2007) CRM is highly dependent on the efficient gathering of relevant information about customers; the more a business can learn about not only what the customer has purchased and expressed a preference for in the past but what the customer is likely to want in the future, the more successful the CRM strategy. This means not only gathering information about the customer’ s interactions with the business but his interactions with the business’ competition as well.
At the very least a business should try to learn where else the customer shops; ideally, however, if the business can also learn which products the customer looked at, which ones he ignored, which ones he eventually purchased, and how he got along with the staff – in other words, the same information the smart business should be recording about its own customer interactions – it can better personalize its products and processes to appeal to the customer. (IMN, 2003) Every CRM strategy has the elements of customer acquisition and customer retention, but depending on the nature and the competitive position of the business, one of these goals will be a priority.
For new businesses or businesses that do not have many competitors, customer acquisition will be the focus of their CRM. For businesses in highly-competitive markets, customer retention will be the primary objective. (Syams & Hess, 2006) This is particularly true for businesses where the products offered by each are very similar in price and features, and where customers are likely to switch products quickly; a very good example of this is the telecommunications market.
(Geppert, 2002) Importance for Companies of Developing Customer Relations The most obvious reason it is important for retailers to understand, interact with, and build relationships with their customers is that by doing so the businesses will better understand what makes the customers buy their products. CRM is especially important when the business’ customers have different characteristics, the business offers a large variety of products or services which the customers add or replace on a frequent basis, and the business has a variety of ways of interacting with customers.
(Microsoft, 2009) One of the most important uses of CRM is to accurately assess the value of a business’ customers, separating high-value customers who make many purchases from infrequent, low-value customers. (Syam & Hess, 2006) The business can then provide the customers with different levels of service, applying strong customer retention management to their best customers. In the case of the less valuable, infrequent customers the business can either choose to ignore them and focus on better customers or more likely will choose to apply customer acquisition management to try to raise these customers’ value.
Birchall, Jonathan. (2009) Home Depot targets customer service. Financial Times, 16 March 2009. [Internet] Retrieved 24 April 2009 from http://www.ft.com/cms/s/ 0/7f82efd0-1250-11de-b816-0000779fd2ac.html?nclick_check=1.
Bond, Patti. (2006) Home Depot revamps service. The San Diego Union-Tribune, 2 September 2006. [Internet] Retrieved 25 April 2009 from http://www.signonsandiego.com/uniontrib/20060902/news_1b2homedepot.html.
Geppert, Carl. (2002) Customer Churn Management: Retaining High-Margin Customers with Customer Relationship Management Techniques. White paper, KPMG, 2002. Retrieved 24 April 2009 from the BNET database at http://jobfunctions.bnet.com/abstract.aspx?docid=144790&tag=content;col1.
Gollan, Casey. (2005) What Is CRM, Customer Relationship Management? Retrieved 24 April 2009 from CompareCRM at http://www.comparecrm.com/articles/crm-articles/What-Is-CRM-Customer-Relationship-Management.php.
Hogansworth, Matt. (2007) CRM For Beginners – Customer Relationship Management Basics. Retrieved 24 April 2009 from CompareCRM at http://www.comparecrm.com/articles/crm-articles/CRM-For-Beginners-Customer-Relationship-Management-Basics.php.
IMN, Inc. (2003) What, Really, Is Retention Marketing? White paper, 2003. Retrieved 25 April 2009 from the BNET database at http://jobfunctions.bnet.com/abstract.aspx?docid=73725&promo=110000.
Jan, Sue. (2007) Customer Relationship Management For A Higher Level Of Customer Service. Retrieved 24 April 2009 from Article Dashboard at http://www.articledashboard.com/Article/Customer-Relationship-Management-For-A-Higher-Level-Of-Customer-Service/60522.
Microsoft Small Business Centre. (2009) What CRM Can Do for Your Business. Retrieved 25 April 2009 from Microsoft at http://www.microsoft.com/australia/smallbusiness/themes/sales-and-marketing/what-can-crm-do-for-your-business.mspx.
Syam, Niladri B., and Hess, James D. (2006) Acquisition versus Retention: Competitive Customer Relationship Management. White paper, University of Houston, 21 March 2006. Retrieved 24 April 2009 from TechRepublic at http://whitepapers.techrepublic.com.com/abstract.aspx?tag=content;col1&docid=277591&promo=100511.