Impact of CRM on Customer Loyalty in Retail Industry

This document discusses the impact of customer relationship management (CRM) on customer loyalty in the retail industry. It explores the importance of CRM in the retail industry, evaluates its impact on productivity and profitability, and identifies the challenges faced in CRM implementation. The study aims to understand how CRM can help in building and maintaining strong customer relationships.

Project proposal
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Table of Contents
INTRODUCTION...........................................................................................................................3
Objectives....................................................................................................................................3
How objectives will be achieved................................................................................................4
Problem statement.......................................................................................................................4
Literature review..........................................................................................................................4
Marketing strategy.......................................................................................................................6
Impact analysis............................................................................................................................6
Constraints...................................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Customer satisfaction have been identified as the major level of business philosophy which have
the tendency in creating the value of their customer by anticipating and managing there with
particular expectations and demonstrating the ability and responsibility to have the satisfaction of
the needs. In addition to that’s the quality of services and the customer satisfaction have been
turned out to be the critical factor for the success of any business. For the business, the key for
achieving the sustainable level of advantages have been lying in delivering their high-quality
services that will be resulting in satisfied customers.
Now a days the company are facing the higher level of competition, in order to have their
increase in the customer retention and encourage them to be the parts of loyalty or repurchase the
product and services (Helgeson, 2017). The company have failed in get resorted to meeting and
satisfying customer needs by not being only reactive but proactive. They are also interested in
finding new ways and means to satisfy the customer. The company have failed in the attracting
the new customer along with failing to retain the previous ones. So there is need to have the
development to work as building there long term relationships with customers, suppliers,
employees, distributors and the general public.
A CRM system maintains and manages data obtained from multiple sources and
touchpoints, including email, the company website, live chat, telephone, and social media, etc.
Sharing customer data between different departments will enable you to work as a team and help
optimize the customer experience.
These companies are striving to satisfy the maximized expectations of each stakeholder
group. The implementation of the customer relationship management has the helped in
identification that’s the retaining the recent or current customer have been less expensive as
compare of attracting the new ones. As the today business environment have been identified to
be high completive have the enveloping the voluntary exchange of the relationship form the both
sides which will make the communication better though the usage of differ in statements.
Aim
To study the impact of customer relationship managements on the customer loyalty in the retail
industry
Objectives
 To analyse the importance of CRM in the retail industry.
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 To evaluate the impact of the customer loyalty on the productivity and profitability of the
company.
 To determine the different challenges faced by the company in implementation of the
CRM
How objectives will be achieved
The objectives will be attained by designing and developing a CRM system which can be
used and installed in retail companies. Within system it will contain various features like storing
of data in segregated way. Then, after installing it the impact of system will be evaluated with
set goals. Then on basis of that changes are made into it.
Research question
 What is the importance of CRM in the retails industry?
 How the of the customer loyalty on the productivity and profitability of the company?
 What are the different challenges faced by the company in implementation of the CRM?
Problem statement
The requirement of the customer for the quality products have been turned out to be evidently
important for the company to maintaining the strategic relationship and provide the better
satisfaction to customers to have defining the business objective in perfect manner. The retail
industry has been increasing making the investments maintaining the customer relationship at to
have the improvement in the service quality and perceived there been customer satisfactions
within each customer. The relationship quality has been taking the positive impacts in increasing
the rate of customer and profitability of the company. The implementation of the customer
relationship management has the helped in identification that’s the retaining the recent or current
customer have been less expensive as compare of attracting the new ones.
Literature review
Theme 1 The importance of CRM in the retails industry
As per the view of the Fredrick and Christopher (2019), he impacts of the CRM in their customer
loyalists helps in the proper determination of the effective CRM practices which have the
leadings the short- and long-term financial profitability. This have the clear level of leading in
maintaining the better customer relationship as there assess the organizations series to have their
dealing in meeting the customer needs and wants in the perfect manner. On the other hand, the
Dalla Pozza, Goetz and Sahut, (2018) have contradicted the statement the corporate client have
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well usage of taking the facility as their customer loyalty have their existence in the client as
well in term of managing the individuals client in perfect manner. This have the clear level of
recommendation but researcher that’s the retail industry should have the clear level of focus in
improvising the supply chains management and customer rations along with taking the feedbacks
form the differ tone.
Theme 2 The impact of the customer loyalty on the productivity and profitability of the
company.
As per the view of the Girchenko, Ovsiannikova and Girchenko, (2017), service quality and the
customer satisfactions have been the key factor in the battle to make the proper obtaining the
competitive advantage and more level of customer retention. The satisfaction of customer have
their outcome understanding in the term of customer perceptions as in transactions to
relationship with valley to be perceiving the service quality. On the other hand, the Reid and
Moffett, (2017), have contradicted the statement as achieving the major level of customer
satisfaction s have the major importance in reckoning and anticipating the need of customer in
order to stratify them in perfect manner. The author supported that statement as the organization
have the need to developed and has the managing the healthy and food level of customer
relationship with all entities to have deal with in perfect manner.
Theme 3 The different challenges faced by the company in implementation of the CRM
As per the view of the Fróis, Pereira and Ferreira, (2018), CRM as understanding the nature of
the exchange between customer and supplier and managing it appropriately. The challenges are
being faced by the suppliers in managing everything in more appropriate manner. There has been
the requirement of monetary considerations between supplier and customer – but also
communication. The company have failed in get resorted to meeting and satisfying customer
needs by not being only reactive but proactive. They are also interested in finding new ways and
means to satisfy the customer. The challenge to all supplier organisation is to optimize
communications between parties to ensure profitable long-term relationships. On the other hand,
the Helgeson, (2017) have contradicted the statement, the companies have the retailer in
developing their successful customer relationship to have the focus of their economically
valuable customers by eliminating the economical invaluable one. There is need to have the
practicing the CRM practices potentialities to the leading in the increased customer retentions
along with nearby increasing the customer loyalty.
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Marketing strategy
It is necessary to effectively enter in market and implement CRM system. Through that, it
will be easy to attract more retail companies to use system. So, there are various types of
marketing strategy which is defined as bellow ;
Competitive advantage- the strategy refers to marketing in order to gain competitive advantage.
So, here, differentiation focus strategy will be adopted. Through that, use of CRM system will
be promoted in it. hence, aim will be to gain competitive advantage in it.
Market segmentation- it is a strategy in which marketing is done by segmenting market and then
doing marketing. Thus, for this project segmentation is done on basis of industry. So, here retail
firms are selected. Then, marketing of CRM system will be done. It will enable in attracting
retail companies (Chatterjee, Chaudhuri. and Chaudhuri, 2020).
Market existence – the strategy refers to promoting it with help of social media and other
platforms. Here, in existing market the entry is done so that local companies can be attracted.
Usually, it enable in focusing on current market so that there is low risk as well.
Impact analysis
It has been analysed that there will be a great impact on use of CRM system in retail sector.
Moreover, this project will affect on business operation and market situation. Here, every
company be able to install CRM system and manage records of their customers. Thus,, it is
analysed that there will be positive impact on retail industry. With use of CRM system,
customer records will be stored in it in segregated way. Furthermore, overall data and info of
each customer will be stored in it. therefore, with that their needs can be analysed and along with
that market trends are identified. So, on basis of that marketing strategies will be developed and
retail business will be able to retain their customers. However, another impact of use of CRM
system will be that there will be managing of records of customers in database. It will enable in
segregating record of customer and then storing in proper way. So, on basis of products
purchased by them customer info can be accessed from system. Furthermore, retail companies
will be able to retain their customer by providing new products to them by identifying their
needs. It will led to creating a loyal customer base and gaining competitive advantage in the
market (Gil-Gomez, and Lozano-Quilis, 2020).
However, it is evaluated that use of CRM system will impact on organization brand image in
positive way. It means that customer complaints will be solved in effective way as all info will
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be stored in CRM. Thus, on basis of that complaints is resolved in effective way. Alongside,
with system customer services can be provided to them quickly and it is ensured that quality of
services remain high. By developing their successful customer relationship to have the focus of
their economically valuable customers by eliminating the economical invaluable one. There is
need to have the practicing the CRM practices potentialities to the leading in the increased
customer retentions along with nearby increasing the customer loyalty.
But on contrary there will be negative impact as well on organization cost. They will have
incur more cost of installing of system and its maintenance. Besides that,, experience IT expert
and customer care executive are hired. It will allow them to analyse complaint and solve
problems. Also, if there occurs any technical failure then data and privacy of confidential info is
breached. In addition, entire operations of handling and managing data will be impacted as well.
In that new process has to be followed (Migdadi, 2020 ).
Constraints
There may occur several constraints in implementing CRM system and achieving goals. So,
it may highly impact on overall project. They are defined as
Arrange of finance – in this there may require additional finance in order to install CRM
system. It is because use of technology and system needs to maintained as well. However, there
is requirement of different hardware and software components in it. Thus, more finance needs
to be arranged in it.
Government approval- it is another constraint in which government approval may be required
for this. The company may need to take permission from government.. they may require to sign
agreement that customer data privacy and security will be maintained, data is not shared with
third party, etc. hence it will impact on project
Resistance from local business - these business may resist to install and use CRM system.
They might think that it is threat for them and they will not be able to survive. Besides that use
of system is unethical for retail firms to retain customers. So, due to that local business retailers
may resist from it. apart from that due to high cost of maintenance of CRM system it might be
possible that local business does not want to use it. thus, it will highly impact on project
completion (Guerra, and Kulchytskyy,, 2020)
Resistance from local people- similarly, it is also a constraint which may occur. The local
people may not want retail business to store and maintain their records in CRM system. So,
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they may not want to give personal details. It will create a barrier for project to be implemented.
CRM system might not be used in effective way.
CONCLUSION
Hereby, it is concluded that a new project of implementing a CRM system is being
undertaken. The objectives is to install a CRM system in order to build and maintain strong
relation with customers. This is done because it requirement of the customer for the quality
products have been turned out to be evidently important for the company to maintaining the
strategic relationship and provide the better satisfaction to customers to have defining the
business objective in perfect manner. In this marketing strategy followed will be market
segmentation as CRM system is installed for retail companies only. It will be entered into local
market where retail companies are operating.
Moreover, there will be positive impact on retail firms with use of CRM system. It enable in
storing of data and info in system and building strong relation with them. Also, customer
problems are solved quickly and in effective way. Moreover, with that their needs can be
analysed and along with that market trends are identified. There may occur certain constraints in
it like arrange of funds, government approval, resistance from local business etc. this directly
impact on install and use of CRM system
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REFERENCES
Books and journals
Chatterjee, S., Chaudhuri, R. and Chaudhuri, S., 2020. Social customer relationship management
factors and business benefits. International Journal of Organizational Analysis.
Dalla Pozza, I., Goetz, O. and Sahut, J.M., 2018. Implementation effects in the relationship
between CRM and its performance. Journal of Business Research, 89, pp.391-403.
Fredrick, K. and Christopher, D., 2019. Investigative analysis of CRM System Implementation
and the challenges attached to its integration into existing ERP System. From an
Organization Perspective: A case study of a Freight Forwarding Company in Sweden.
Fróis, J., Pereira, M.T. and Ferreira, F.A., 2018, June. How a CRM tool can contribute to a better
business performance: The case of a shipping company. In International Conference on
Innovation, Engineering and Entrepreneurship (pp. 811-817). Springer, Cham.
Gil-Gomez, H. and Lozano-Quilis, J.A., 2020. Customer relationship management: digital
transformation and sustainable business model innovation. Economic Research-
Ekonomska Istraživanja, pp.1-18.
Girchenko, T., Ovsiannikova, Y. and Girchenko, L., 2017. CRM system as a keystone of
successful business activity. Knowledge-Economy Society: Management in the Face of
Contemporary Challenges and Dilemmas, pp.251-261.
Guerra, F. and Kulchytskyy, V., Sugarcrm Inc, 2020. Structured touch screen interface for
mobile forms generation for customer relationship management (CRM). U.S. Patent
10,546,052.
Helgeson, L., 2017. CRM for Dummies. John Wiley & Sons.
Migdadi, M.M., 2020. Knowledge management, customer relationship management and
innovation capabilities. Journal of Business & Industrial Marketing.
Reid, A. and Moffett, S., 2017. KM as a Facilitator for CRM in a US Print Company. Electronic
Journal of Knowledge Management, 15(1), p.49.
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