Analysis of Digital Technology in Customer Relationship Management

This report provides a critical evaluation of the use of digital techniques in customer relationship management (CRM). It explores how CRM helps businesses identify consumer needs, enhance customer satisfaction, and increase profitability. The report discusses the benefits of digital CRM, such as personalized customer experiences, improved communication, and the ability to segment customers. It also covers the importance of maintaining customer loyalty, the 80/20 rule, and the potential costs associated with CRM implementation. The analysis highlights the advantages of CRM, including rapid market growth and improved sales, while also acknowledging potential disadvantages such as a customer-centric focus and investment requirements. The report concludes that CRM, especially when digitized, is beneficial for companies aiming to improve customer management and maximize profitability.

Managing the Customer
Experience

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Use of digital technology in costumer relationship management...............................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Customer relationship management (CRM) means development and maintenance of
strategies in order to enhance efficiency of business in making relation with its customers. This
report includes critical evaluation of use of digital techniques in the customer relationship
management.
MAIN BODY
Use of digital technology in customer relationship management
Every company needs CRM technique as it helps company in identifying consumer needs
which may lead providing better satisfaction to consumers and increasing profitability of
organisation.
It refers to a managerial technique which includes practices, plans and strategies
regarding management and analysis of interaction of company with its customers in order to
sustain them, with the company for a long time.
If the company have better CRM technique, it will be enable to provide better services to
consumers as per their needs and demands. It will help company in developing numerous loyal
customers for company (Soltani. and Navimipour, 2016 ). And also by developing loyalty
program for them like, providing special services to loyal customers, etc. company can make
them staying with it for long time.
Customer relationship management as a digital technology provides the 360 degree view
in relation to the experience of the customers which could be used for creating customized on the
basis of their interest and the purchase history. CRM plays an important role in the gaining the
experience of the customers as it helps in developing meaningful communication with the
customers and also helps in allowing for segmenting customers and in addressing right audience.
For example- CRM software enables in speeding up the responses towards the customer
inquiries by making use of ready-made email templates.
Mobile CRM helps in facilitating the better customer experience in offering updated information
regarding products, contracts and deals. It also helps in following up the opportunities at right
time.
Underpinned theory of CRM
1

Company need to maintain regular contact with its customers. Maintaining loyal
customers with company's services helps organisation in becoming more cost effective as for
attracting new customers, business needs to invest in advertisement.
Company also needs to remember “80/20” rule in context of customers, which says that
company's 80% profit is generated by its 20% customers. In this regard, business need to develop
strategies to maintain those 20% customers with business to gain maximum amount of profit
from them (Customer Relationship And 80-20 Rule Of Pareto, 2019).
Use of digital CRM
With the help of digital CRM, business can identify actual habits of its customers and
also can categorise customers like platinum, gold, iron or Lead demanding by maintaining their
personal accounts. Through digital technique, company can also send messages to each
customers in order to keep in touch with them and maintain a good relationship with them
(Nyadzayo, and Khajehzadeh, 2016).
Potential Benefits
 It helps in maintaining customers with company.
 Company can make cross-selling and up-selling without incurring any extra cost.
 It also provides a point to consumers to make contact with company.
Along with potential benefits, business also need to incur some potential costs like cost of
changing process of management whenever it needed, cost of developing or innovating IT
infrastructure in business as per need of CRM (Taylor, 2015).
Advantages
 CRM makes company growing in market quickly, which also gives mental satisfaction to
customers.
 It helps in rapidly growing of sales and profit of company.
 It makes company more cost effective.
 It helps management in having developing better strategies for business to enhance its
profitability and sales.
Disadvantages
 CRM shifts focus of organisation shifts to customers only, it may lead in enahncing
inefficiency in other factors of business.
2

 It needs major investment by business in hiring CRM team, developing company's
infrastructure according to them, etc.
 It may lead in inefficiency of management over other factors of business which may
result in loss to company (Marum, and Moran, SugarCRM Inc, 2016).
CONCLUSION
As per the above study it has been concluded that CRM is beneficial for a service
provider company. It helps in gaining maximum profitability by attracting maximum customers
towards company's services. The study has also concluded that through digitization in CRM,
business can have better management of customers in business.
3

REFERENCES
Books and Journals
Marum, M. and Moran, W., SugarCRM Inc, 2016. Retail deployed customer relationship
management. U.S. Patent Application 14/562,659.
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.
Soltani, Z. and Navimipour, N. J., 2016. Customer relationship management mechanisms: A
systematic review of the state of the art literature and recommendations for future
research. Computers in Human Behavior. 61. pp.667-688.
Taylor, J. and et.al., 2015. Customer relationship management system and method. U.S. Patent
8,972,876.
Online
Customer Relationship And 80-20 Rule Of Pareto. 2019. [ONLINE] Available through
<https://www.techrepublic.com/article/think-80-20-is-a-new-idea-heres-how-to-wise-
up/>
4