Customer Relationship Marketing Essay

Customer Relationship Marketing (CRM) is a perspective on how the organisation can relate to its customers and to other stakeholders, which has an impact on how the organisation is developed and customers are managed. It focuses on managing relationships with customers, with a strong emphasis on customer attraction and retention, while creating long term relationships between a service provider and a customer for their mutual benefits.

Customer Relationship Marketing is concerned with how organisations manage and improve their relationships with customers for long-term profitability. If the management of the collected data is not shared across relevant organisational functions, the organisation will be unable to create sustainable relationships

Organisations should increase the number of products and services that add value for the customer and are profitable for the organisation, since it can ensure that the rewarding lifetime value of the relationship is maximised. The impact of existing market information helps to manage the relationship with customers effectively, and the linkage between marketing, communication and CRM must be strong. CRM adds information regarding marketing, sales and service functions through organisation process automation, technology advancements and information resources like market research institutions in order to maximise customer contact. Therefore understanding customers’ needs and purchasing behavior, effectively manage interaction which they have with a customer. These interactions can arise when customers interact with employees in the organisation through customer contact centres, but also through advertising and sales promotion activities. CRM raises the bar for customer service expectations as organisations exhibit greater customer recognition and treat customers as individuals. Thus, CRM can provide organisations with a competitive advantage (Baran et al., 2008:9-10; Du Plessis et al., 2005:81-87). Customers will trust organisations that they (through past experiences) have learnt can be trusted. Unfortunately,

Impact of provision of service quality has on CRM is to able to use the available information to identify the most profitable customers, keep them and increase the usage of the organizations products and services, and to trade them up to more admired and expensive items over time (Read, 2009:28; Baran et al., 2008:7; Rootman, 2006:31;). Service quality impact CRM on adopting a customer focus that enables an organisation to retain loyal, profitable customers and a greater share of the customer’s wallet through cross-selling and up-selling. Organisations attempt to increase the customer lifetime value through efforts such as personalisation, customisation and effective customer profit projections based on recent measurements. The resources of the organisation have to be used in such a manner that the trust customers have in the organisation is maintained and strengthened (Ndubisi and Wah, 2005:545). A long-term relationship between organisation and customer will only develop if the relationship is mutually beneficial (Baran et al.,