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Theories and Models of Customer Relationship Management : Report

   

Added on  2020-06-06

14 Pages4576 Words81 Views
Finance
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THE BENEFITS ANDCHALLANGES OFCUSTOMER LOYALTY
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Table of ContentsINTRODUCTION...........................................................................................................................1DEFINITIONS OF KEY CONCEPTS ...........................................................................................1MAIN BODY ..................................................................................................................................2ESSAY THEORIES........................................................................................................................5CONCLUSION AND RECOMMENDATIONS............................................................................8REFERENCES..............................................................................................................................10
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INTRODUCTIONCustomer loyalty is important for the firm in order to create target customers for firmwhich will help to increase sales and profitability. Customer relationship management is crucialfor firm that it will help them to increase their sales and also to identify potential customers.Relationship marketing was first defined as a form of marketing developed from direct responsemarketing campaigns which emphasizes customer retention and satisfaction, rather than a focuson sales transactions. There are many benefits and challenges are associated with customerloyalty. The report will cover benefits and limitations of customer loyalty with examples tounderstand. Theories and models related to customer relationship management and experiencewill be discussed in this report. Relationship marketing and key aspects will be covered in thisreport which demonstrate how to increase potential customers and sales accordingly.DEFINITIONS OF KEY CONCEPTS Relationship marketing: Relationship marketing is very important for the firm that it is a facetof customer relationship management CRM which is focused on long term customersengagement and loyalty effectively. It is not focused on short term customer goals such asacquisition and individual sales Balaji, (2015). Relationship marketing was first defined as aform of marketing developed from direct response marketing campaigns which emphasizescustomer retention and satisfaction, rather than a focus on sales transactions. Customer relationship: Customer relationship is all about maintaining the positive behaviour ofconsumers in the market towards products and services by ensuring the quality and effectiveness.It can be described as a development of running connection between firm and its clientseffectively. The relationship management include support to sales, effective communication andtechnical assistance. Customer relationship management is crucial for firm that it will help themto increase their sales and also to identify potential customers.Customer Loyalty:It can be said that there are many different definitions of customer loyalty.Yet so many fails to recognise that customer loyalty moves hand in hand with emotion. In simplewords customer loyalty describe the positive emotion, experience and physical attributes ofcustomer towards products and services Xu, Peak and Prybutok, (2015). They become loyal forthe brand and continue to purchase with them effectively. Organisations should improve theircustomer loyalty in order to increase its sales and profitability. Customer loyalty is important for1
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the firm in order to create target customers for firm which will help to increase sales andprofitability.Customer Relationship management: Customer relationship management in simple words is ainteraction between company and its customers through their business relationships. This caninvolve discovery, awareness, services, advocacy and purchasing behaviour Askariazad andBabakhani, (2015). Customer relationship management also refers to the behaviour of anindividual after using the products and services offered by firm in the market effectively. Thiscan be positive or negative and depends on the quality of products and services. The companyshould understand customer experience that is an integral part of customer relationshipmanagement. Different company have long evaluated touch points and also some criticalmoments in which a customer interact with firm, offerings and purchase after.MAIN BODY BENEFITS OF CUSTOMER LOYALTYCustomer loyalty moves hand in hand with emotion and they become loyal for the brandand continue to purchase with them. Organisations should improve their customer loyalty inorder to increase its sales and profitability. Customer loyalty is important for the firm in order tocreate target customers for firm which will help to increase sales and profitability. Here are somebenefits of customer loyalty for the firm discussed below:Brand Advocacy: According to Benedettini, Neely and Swink, (2015),brand advocacy occurswhen a customer becomes a brand advocate. Brand advocates are your raving fans evangelistswho are so hopelessly in love with your brand that they will go out of their way to promote it foryou, without having to be compensated. Brand advocacy is supported by social media to becomemore strong and powerful. Followers on Facebook, Instagram, Twitter will view ideas andthoughts as creditable that it will help to promote the brand as well. It can be said that a strongfollowing of brand on social media will help to achieve better rankings. This will attract newcustomers as well and increase sales for the businesses.For an example, Morrison is famous clothing and other retail and food, drink firmprovides fashionable clothes for men and women through online shopping and also supermarketsare available for the customers Bohari, Hin and Fuad, (2017). The firm is located mainly inUnited Kingdom. The company has a number of followers on Facebook such as 679913 likes,2
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