Importance of Customer Relationship Management for Agency X

The project provides valuable insights into the significance of customer relationship management for businesses in the long run.

BUSINESS TO BUSINESS MARKETING

Table of Contents
Case study:.......................................................................................................................................3
1.0 Introduction................................................................................................................................3
2.0 Importance of managing the customer relationship...................................................................4
Requirements for successful implementation of projects............................................................5
3.0 Utilising employees’ time efficiently........................................................................................8
Differentiation and identification of the worthy client..............................................................10
4.0 Conclusion...............................................................................................................................12
Teaching Notes..............................................................................................................................13
1.0 Relationship portfolio..............................................................................................................13
2.0 Unprofitable customers and whale curves...............................................................................15
References:....................................................................................................................................17
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Case study:
1.0 Introduction
The relationship between business and clients or customers is considered as one of the most
imperative factors in determining the future prospect of the business. In the statement of Kumar
and Reinartz (2018), it can be stated that companies those are unable to treat their customers well
usually left out with unsatisfied or disloyal clients. This specifically hampers their trading future
and creates scope for competitors to convert this set of disloyal clients into loyal ones. Hence, the
sustainability of the firms comes into a big question. Therefore, maintaining positive relations
with the customer has become the become mantra for any business to thrive in the long run.
For the specific project, Agency X, one of the integrated media agencies has been chosen. The
name of the company has been kept confidential for the privacy concern; however, the data of
the company would be discussed in relation to customer relationship management. The brand
offers services like campaign designs, market analysis, brand analysis, strategy and budgeting,
web marketing, media coverage and planning, etc. By far it has worked with reputed clients like
Diamond Arabia, Taj Dubai, Middlesex University, Sofitel Dubai Downtown, Adipec Social,
etc. The project aims to discuss the importance of proper customer relationship for the
organisation and the effort it takes to retain their multiple customer bases.
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2.0 Importance of managing the customer relationship
Powerful customer service is relatively essential to this business. As it deals with multiple
clients, therefore, the possibility of this business to face issues in terms of customer handling is
quite high (Soltani and Navimipour, 2016). It has been identified that the brand is dealing with
the media segments and has reputed organisations at its client base. Therefore, forming
meaningful relationships with this multiple client base is effectively important to get future
assignments. In the considerations of Nyadzayo and Khajehzadeh (2016), forming meaningful
relationships with client’s demands for efforts, time, dedication, faithfulness and trust. Hence, it
can be determined that maintaining a positive relationship with the multiple clients has been the
primary agenda for Agency X in the Dubai market to experience future sustainability in the
future.
Furthermore, it has been determined from the corporate website of Agency X that the brand
usually looks are the marketing creative sides, it has expanded its service lines from ATL (Above
The Line), BTL (Below The Line) to Social sites, which indicates the fact it generally covers
majority of media and marketing designs (Agency X, 2018). Hence, the brand needs to be abrupt
in terms of maintaining its relationship with the customers. On the contrary, Khodakarami and
Chan (2014) determined that the market is considerably saturation in terms of offering media-
based services; hence, the numbers of the competitor are quite high. This imposes a major threat
towards Agency X and encourages the management of the brand further in maintaining positive
relationships with its clients to ensure a good retention rate. Hence, the possibility of conversion
by the rivals is quite high in this sector. Thus, to ensure such discrepancy, the brand is relatively
getting sincere with their customer service management approach to ensure a high satisfaction
rate amongst its major clients.
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To keep its client happy and all time accessible, the brand has introduced “Let’s talk” option,
using which the clients can anytime start interacting with the brand and place their queries. This
has specifically helped the clients to get in touch with the brand and communicate with the
respective department in terms of pending and delivered projects. Hence, it has been noted that
Agency X is making the efficient approach in terms of helping its clients to reach the customer
care department in case any issues faced with the marketing or media related designed of the
brand.
Requirements for successful implementation of projects
The requirements that are needed for successful implementation of projects are discussed below:
Correct interactions
It has already been discussed in the above section that Agency X is an integrated media agency
and a communication partner, which aims to create a brilliant fresh experience for its clients'
brand. Since the organisation has managed to create a decent customer base and majorly works
for the giant brands, therefore, it needs to be flawless with the communication measures (Greve
and Schlüschen, 2018). The clients herein specifically demand personalised designs and the
executives of the brand are explicitly efficient and versatile to address the different and
dissimilar designs of the projects. Hence, correct interactions herein act as the most phenomenal
part, which always keeps both the parties connected in terms of exchanging individual feedbacks
in terms of project designs (Choudhury and Harrigan, 2014). This can help Agency X in actually
deliver a suitable output by addressing the specific and every minute detail of the clients.
Therefore, this approach can lead to a successful implementation of projects.
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Creative design
In the opinion of Taylor et al. (2015), it can be noted that the brands are getting typical with the
media-related activities and seek innovation in every marketing lines. Therefore, they are
showing preference towards media agencies which are proving their innovation, creativity and
versatilities with the passage of time. Hence, it is explicitly significant for Agency X to be
adaptive with the creative aspects and the updated trends in terms of media, studio and social
marketing designs. It has been recognised from the corporate website of the particular brand that
agency X has been extremely creative with its marketing and media related canvas, which
certainly interests the client companies to avail their service lines with any doubt (Agency X,
2018).
Accessibility
Accessibility is another important aspect that decides on the success of the project implemented.
It has been discussed in the earlier section that this type of project requires frequent interactions
between clients and the brand (Aliyu and Nyadzayo, 2018). The clients usually provide
personalised designs related to the projects. Since different brands deal with different products or
service lines, henceforth, the marketing designs and criteria of each brand would be different
from one another (Kasemsap, 2018). Hence, accessibility is very important in this case, where
clines constantly communicate with the executives of Agency X in terms of explaining the
details of the projects and the aspects required in final deliverables.
Trusts
Finally, trust has been one of the most imperative factors that are important for the successful
implantation of projects. In the consideration of Badwan et al. (2017), it can be determined that
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suitable customer relationship and provision of accurate services are the best suitable
determinants to gain customers’ trusts and loyalty. This enact as the driving force that helps
organisations to retain its potential prospects and keep their satisfied. A client that trusts a brand
shows a willingness to take frequent services from them despite few discrepancies (Kumar and
Reinartz, 2018). Mutual understandings develop between both the parties that effectively
complement one another's' needs. Hence, trust and loyal clients would also act in favour of
Agency X, where the satisfied clients would promote it service lines through positive word of
mouth communication and create space for new clients as well.
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3.0 Utilising employees’ time efficiently
Simplifying customer service lines
In the statement of Soltani et al. (2018), it is significant to simplify the customer service lines by
eliminating bureaucracy, which actually brings no productive sides but negative effects on
companies and leaves customers immensely frustrated. Hence, a simple customer service process
would lead to shorter and precise conversations and executives would enable to help their clients
following the uncomplicated steps. Therefore, the chances of process efficiency are high with
limited confusions. According to Skoumpopoulou and Franklin (2018), the efforts behind this
approach are not only to remove the unnecessary processes but also to enlighten the CRM
executives to identify the simple procedures in handling every customer’s issues.
Right etiquettes
It has been identified that right etiquettes facilitate the employees to make the communication
process easy, clear and polite (Ascarza et al. 2017). Hence, it reduces the unnecessary time for
problem-solving. The organisations that fail to implement the right etiquettes within employees
fail to address or approach their clients with right attitudes, which often lead to conflicts and
negative word exchange. Moreover, Taylor et al. (2015) denoted that professional language
would also create trust within the workplace and workforce as well. As a result, customers would
feel much comfortable to rely on the offered service Agency X offers and would support the
brand in conducting the business successfully, which would relatively benefit the brand in
earning long-term potential and loyal customers.
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Empowering service agents
Even though the most effective training programs in which the database of CRM brand is loaded
with under strict supervision and rules is bound to fail if the service agency is discriminated and
not given the required freedom to design their tasks (Kumar and Reinartz, 2018). Although,
statistically it has been proven that majority of the customer related issues are repetitive and
solutions to which are already known, yet, the frequencies of new challenges and situations faced
every day are very considerable. Until new situations and queries are no framed with new
readymade answers, it is significant for the agents or executives to feel confident and competent
to utilize individual skills and judgment to identify new solutions (Kasemsap, 2018).
Smart work
Smart work is really important in terms of employee efficiency. Employees often get bogged
down with too much work pressures and amendments on previous projects. This also affects
their work-life balance and enthusiasm towards work management. Therefore, employees shall
be given the training to identify the smart techniques through works and tasks can be handled
efficiently (Aliyu and Nyadzayo, 2018). The employees need to smart in terms of
communication with the client and addressing their issues. The communication plays the most
important aspects herein, where employees need to use their expertise in getting the work done
by ensuring high quality but fewer efforts.
Using right customer service tools
Usage of right customer service tools is also imperative in delivering a service or tasks with high
efficiency. In the consideration of Taylor et al. (2015), even the well trained, responsible and
knowledgeable executives cannot give their best performance unless they are supported with
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requiring tools and measures. In terms of customer support, the speed of response is necessary
and important to gain customers satisfaction. For example, if the employees of Agency X do not
have proper access to their customers’ information, a quick service delivery cannot be given.
This would relatively lead to dissatisfied and frustrated clients, which would finally impact on
the relationship. Due to the lack of features, tools and measures, the executives sometimes
require to ask customers to provide the information, which is already provided by them. This
usually leads to the wrong impression on the company’s unprofessionalism.
Encouraging strong team spirit
The more employees stay engaged within the team, the more they would be relaxed and easy,
which significantly encourage them to perform better without creating any stress. According to
Taylor et al. (2015), creating support for one another, sharing each other experiences and
maintaining a positive approach in the team help employees to work easy. Inevitably these
positive vibes create a similar impact on customers as well.
Differentiation and identification of the worthy client
The differential and identification would be evaluated with the support of the IDIC Model
Identify
It would be important for agency X to conduct a thorough research work on its customers that
would be targeted or who would be given future services. It is worthy to work with the client
base that has a positive reputation in the market. This equivalently works as a promotion for
service agents as well. In case of Agency X, the brand relatively works with the giant
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organisations, therefore, it can to be more careful in terms of choosing its future client base
working with who it can retain its market position.
Differentiate
Herein, the customers are to be differentiated in terms of value and needs. Herein, the customers
that can help the brand in getting or optimising its value proposition grade shall be considered for
future works (Kumar and Reinartz, 2018). Moreover, the brand shall be able to identify the
customers’ needs in terms of required service lines, in case the needs are not suiting with the
services offered by the brand, it shall back out.
Interaction
Once the brand gets into a contract with its customers, it shall emphasis on the interaction with
its client base to comprehend their expectations. This would decide on their future relationship
with the brand. Interaction directly with the customer would help the brand to precisely
understand their needs, based on which the project or service would be designed.
Customise
After differentiating the customers as per values and needs, the brand needs to customise the
service lines as per the desires and detailing of the customers. Proper customisation would lead
to innovation and uniqueness, which would automatically lead to happy and satisfied clients.
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4.0 Conclusion
The project has reached a concluding statement by underscoring the importance of customer
relationship management for Agency X and the efforts the brand has taken and needs to take in
future to retain its satisfied an loyal clients. The brand is taking a sincere approach in terms of
maintaining its multiple clients and keeping a positive relationship with each. However, some of
the measures are discussed herein; following which Agency X can avoid future challenges and
threat of saturation. In this context, the scenario provides two pertinent questions which may be
attempted to answer through subsequent parts of the report. It is needless to mention that such
questions will act as a guide for Agency X in devising its B2B marketing strategy. The questions
are mentioned below:
Question 1: Is it necessary for Agency X to manage relationships with clients?
Question 2: How can the Agency X differentiate and identify the clients worthy of relationship
management (profiting making clients)?
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Teaching Notes
1.0 Relationship portfolio
As far as relationship portfolio is concerned, it may be noted that each and every company may
need to maintain a strong relationship with its stakeholders in order to sustain and grow in the
market on a long-term basis. In this context, it may be noted that the approach of having a strong
and sustainable relationship with the customers of the business holds a pivotal role in
determining the success rate of the business. It has been identified that a number of companies
fail to sustain in the midst of cut-throat market competition only because of the fact that the
management of those firms miserably fails to have a smooth and sustainable client relationship in
the market.
In this note, a reference to 80/20 Pareto Principle may be worth to discuss. The said principle
talks about the fact that almost in majority cases, the top 20 per cent of the population represents
its 80 per cent features. In the case of a nation, it may be observed that almost 80 per cent of the
total wealth of the country is concentrated in the top 20 per cent of rich persons or groups.
Likewise, the principle may be applied in the case of a client relationship as well. This theory
may come handy especially in the case of strategy formulation where the management may need
to have a strong customer relationship strategy to deal with a number of customers with the
different economic background, tastes and preferences. In other words, the principle helps the
management to make an informed and well-thought judgement on sampling.
In the case of Agency X, the same rule applies as well. However, since the company is a private
limited and hence the financials and other business data may not be readily available in the
public domain like a corporate website with ease, it may not be possible by conducting a
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secondary research to gather the customer related data for the firm. In the given circumstances,
the actual data for the firm may not be readily accessible and hence, an effort has been made to
show the implication of the given principle by exemplifying the scenario by way of dummy data.
The aforesaid data is presented in the table below for the purpose of substantiating the theory and
its practical importance in the given case.
Company name Sales last year $m
Company A 75
Company B 12
Company C 27
Company D 45
Company E 26
Total 185
In the above table, it may be noted that Agency X has top 5 customers who provide most of the
revenue for the firm. Corresponding sales figures for the last year have been presented herein. It
may be assumed that Agency X had total sales of $200 million in the last year. In the given
circumstances, it may clearly be construed that Agency X has almost 93% of its total sales from
top 5 customers which means that the firm must prioritise those top 5 customers for enhancing
not only the revenue stream and sustaining in the market by providing value-added services. To
put it differently, if Agency X does not chalk out a strategy for customer relationship
management emphasising more on its top and priority customers, such clients may go to its
competitors causing a major top-line loss for the firm in the long-run. Therefore, it may be
concluded that the client relationship is critical in B2B marketing and Pareto Rule of 80/20
should be adhered to in such case to establish a value for the firm in the industry.
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2.0 Unprofitable customers and whale curves
Based on the discussion and analysis performed in the preceding sections of the paper, it may be
considered that the identification of priority customers is utmost needed in order to strategize the
client relationship for the firm. However, it may also be noted that the unprofitable customers
will also need to be identified for gaining the efficiency in top-line as well as in the bottom-line
of the business. The table below shows the assumed data from a previous table and some
additional data related to clients who are contributing losses to the companies. The table shows
the total customer base of the business with their corresponding gross margin contribution to the
firm. The third and last column of the table shows the cumulative gross margin for the firm.
Company name Gross margin $m Cum. gross margin $m
Company A 45 45
Company D 30 75
Rest of the companies 25 100
Company E 20 120
Company C 15 135
Company B 8 143
Company F -1 142
Company G -12 130
Total 130 130
From the data above, it may be inferred that Agency X is losing from Company F and G.
However, it may also be kept in the mind that such loss does not tantamount to the overall loss
for the firm as the cumulative margin is always positive. But, an in-depth perusal of the situation
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may reveal the fact that the firm may need to manage Company F and G accordingly so that the
revenue stream gets more stabilized and streamlined.
Company
A Company
D Rest of the
companies Company E Company C Company B Company F Company
G
0
20
40
60
80
100
120
140
160
Cum. gross margin
If the figures in the last column of the previous table are plotted in a graph, the curve will like a
wheel and that is why the wheel curve is an important and critical point of consideration for
managing client relations. In conclusion, it may be recommended that Agency X may need to
figure out its customers who are responsible for the loss of the firm and eliminate the
inefficiencies either by way of termination or modification of contractual relationship with them.
In addition, the critical customers who are making money for the business may need to be
prioritized in terms of value-added service and better offering.
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References:
Agency X (2018). Agency X. [online] AgencyX.com. Available at:
https://www.agencyx.com/index.html [Accessed 16 Nov. (2018)].
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Ascarza, E., Ebbes, P., Netzer, O. and Danielson, M., (2017). Beyond the target customer: Social
effects of customer relationship management campaigns. Journal of Marketing Research, 54(3),
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Badwan, J.J., Al Shobaki, M.J., Naser, S.S.A. and Amuna, Y.M.A., (2017). Adopting technology
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Choudhury, M.M. and Harrigan, P., (2014). CRM to social CRM: the integration of new
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Greve, G. and Schlüschen, A., (2018). From Customer Relationship Management to Influencer
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Kasemsap, K., (2018). Facilitating customer relationship management in modern business.
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Khodakarami, F. and Chan, Y.E., (2014). Exploring the role of customer relationship
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