Customer Relationship Management

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Customer Relationship Management

Introduction

Marketing has evolved substantially with the advent of technology. Technology has not only introduced additional communication channels to marketers but also allow them to collect large amounts of data and analyse it efficiently to improve segmentation, communication within segments and designing products to meet the needs of customers. Technology provides customers with more power since they are now able to easily compare offerings from various organizations and selecting the offer with the highest perceived customer value.

In order to remain competitive organizations need to understand their customers better, but Maklan, Knox, and Ryals (2008) argues that it is increasingly difficult to understand customers with traditional marketing methods and that “traditional market research is in danger of being left behind by new practises in sales, marketing and R&D.”(p.221). Customer relationship management (CRM) is one such new practice explained as “an approach based on maintaining positive relationships with customers, increasing customer loyalty, and expanding customer lifetime value” (King & Burgess, 2008,p.421).

The explanation provided by King and Burgess (2008) alludes to an important shift from traditional marketing principles which focused more on transactional selling to that of customer lifetime value (CLV) defined by Ryals (2005) as the net present value of all future customer profits (future revenue stream less future cost to serve the customer). This is supported by the argument that “CLV is rapidly gaining acceptance as a metric to acquire, grow, and retain the ‘right’ customers in CRM. Marketing theory and practice has become more and more customer centered sic, an...

... middle of paper ...

...al, 30(2), 203-223.

Kalaignanam, K., & Varadarajan, R. (2012). Offshore outsourcing of customer relationship management: Conceptual model and propositions. Journal of the Academy of Marketing Science, , 1-17.

King, S. F., & Burgess, T. F. (2008). Understanding success and failure in customer relationship management. Industrial Marketing Management, 37(4), 421-431.

Maklan, S., Knox, S., & Ryals, L. (2008). New trends in innovation and customer relationship management: A challenge for market researchers. International Journal of Market Research, (2), 221.

Richards, K. A., & Jones, E. (2008). Customer relationship management: Finding value drivers. Industrial Marketing Management, 37(2), 120-130.

Ryals, L. (2005). Making customer relationship management work: The measurement and profitable management of customer relationships. Journal of Marketing, , 252-261.

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