Introduction to Customer Relationship Management

Introduction to
Customer Relationship
Management (CRM)

Customers
Customers are those that purchase products or avail the services
They can be a one time purchaser or a multiple time
Those who consider another buy from the same service provider are known as loyal customers
(Rahimi 2017)

Types of customers
Customer can be of two types depending on their number of visit to a particular service provider.
Types:
•One time customer: They are the one time purchaser. They might have been to the service
provider because they had some positive word-of-mouth for the service provider or they have just
visited without even noticing the brand name
•Loyal customers: These are the repeated and the satisfied customers who use the products or
services from the same employer on a regular basis
(Nyadzayo and Khajehzadeh 2016)

Elements of customer loyalty
When service providers are honest, reliable and credible with their services, they are actually
giving reasons to customers to consider visiting to the same service provider time over again
(Rahimi and Kozak 2017)

Comparing loyal customers with one-time
customers
Loyal customers
• They have preferable choice of service
providers
• The trust is always there when a new
product is launched
• Innovation is a key to success for
service providers as loyal customers
must have reasons to stay longer
• Increasing base of loyal customers is a
potential resource to incrementing
sales and therefore, the net profit
(Nyadzayo and Khajehzadeh 2016)
One-time customers
• They are also important as they
add numbers to business
• Efforts are given to convert the
onetime customer into loyal
customers
• Customer retention is a key in this
regard
• They may have a critical view on
any new product launch
(Raju, Bai and Chaitanya 2014)

Customer retention
What is customer retention...???

Customer retention continued…
Customer retention is like an
achievement that lets a firm retain the
visiting customers
The purpose is to increase the rate of
conversion from one time customer to
loyal customers
An incrementing customer retention rate
means a rising profitability
Retained customers become the loyal
customers for their effective involvement
with the service provider
•Customer retention and hence, customer
loyalty creates the needs for innovative
and effective strategy making from the
service provider
(Trainor et al. 2014)

Customer loyalty cycle
The first phase in the loyalty cycle is customer acquisition which means giving
customers the assurance of quality product and service. Once, they are assured
of the offers, they are educated on the benefits which is unique only to the
service provider. Customer satisfaction in this phase of cycle means a
commitment for purchase. The next and the last stage of the cycle is to retain
the one-time visiting customer. This face is known as the continuation and the
activity phase.
(Nyadzayo and Khajehzadeh 2016)

Ways to manage customer loyalty cycle
Customer relationship management (CRM)

Customer relationship management (CRM)
Customer relationship management is an approach that modern day organizations adapt to
manage its relationship with customers. It utilizes the data analysis to know its customers and
their interactions with firms. Such tracking of history enable firms to strategies their plans and
schemes accordingly. The strategy is used to increase the customer retention rates and ultimately
driving
the sales growth. (Navimipour and Soltani 2016)

Importance of customer relationship management
Customers are served with products and services relevant to their needs and demands
Pricing and product quality is customized
Customer retention rates are increased as well
(Rahimi 2017)

Importance of customer relationship management
continued…
Helps to improve the customer services
Increased personalization of service
Relevancy to customer’s needs
Customer segmentation
Customization of marketing is improved
It is time saving as well
Customer knowledge is improved
(Navimipour and Soltani 2016)

How CRM improves customer service standard
It helps to view the order and payment history
Such history provides the useful data which can be analyzed to offer more relevant offers to
customers
CRM can be integrated with the various social media sites which is helpful in observing the
responses from customers and also the customer complaints can also be acknowledged
Employers would also be able to justify the commitment it had made
Customer retention will increase and thereby will impact upon the customer loyalty level
(Nyadzayo and Khajehzadeh 2016)

Types of CRM
Four types of CRM
It is important to analyze the most feasible CRM that serves the operational needs which is
specific to employers. It is important because there are mainly the four kinds of CRM depending
upon its area of expertise. The operation team must identify the best feasible CRM from the
following list to yield the best results:
Strategic – It helps in developing a business culture which is customer-centric
Analytical – This is helpful in analyzing the data and helping the managers to commence the
informed decisions
Operational – It provides the capability to integrate the CRM with marketing activities. It helps in sales, marketing and
customer assistance
Collaborative – It facilitates the flow of information within the organization related to vendors, suppliers, customer and
distributors
Customer data platform – It is generally being used for marketing purpose. It helps to maintain a database that
collects the information of customers and keep it stored within it in an organized way
(Raju, Bai and Chaitanya 2014)

List of references
1. Navimipour, N.J. and Soltani, Z., 2016. The impact of cost, technology acceptance and employees'
satisfaction on the effectiveness of the electronic customer relationship management
systems. Computers in Human Behavior, 55, pp.1052-1066.
2. Nyadzayo, M.W. and Khajehzadeh, S., 2016. The antecedents of customer loyalty: A moderated
mediation model of customer relationship management quality and brand image. Journal of Retailing
and Consumer Services, 30, pp.262-270.
3. Rahimi, R. and Kozak, M., 2017. Impact of customer relationship management on customer satisfaction:
The case of a budget hotel chain. Journal of Travel & Tourism Marketing, 34(1), pp.40-51.
4. Rahimi, R., 2017. Customer relationship management (people, process and technology) and
organisational culture in hotels: Which traits matter?. International Journal of Contemporary Hospitality
Management, 29(5), pp.1380-1402.
5. Raju, P.S., Bai, D.V.R. and Chaitanya, G.K., 2014. Data mining: Techniques for enhancing customer
relationship management in banking and retail industries. International Journal of Innovative Research
in Computer and Communication Engineering, 2(1), pp.2650-2657.
6. Trainor, K.J., Andzulis, J.M., Rapp, A. and Agnihotri, R., 2014. Social media technology usage and
customer relationship performance: A capabilities-based examination of social CRM. Journal of
Business Research, 67(6), pp.1201-1208.