Customer Relationship Management

In order to overcome the challenges faced as they attempt to cultivate and manage customers, many marketers must continually conduct marketing research to evaluate customers to determine what they want. And, uncovering what customers want is made significantly easier if a company establishes methods designed to manage its customers. The most widely adopted method for managing customers is a business concept known as Customer Relationship Management (CRM).

CRM and “Good” Customers

CRM is a strategic approach whose goal is to get everyone in an organization, not just the marketer, to recognize the importance of customers. Under CRM, the key driver for marketing success is to treat “good” customers in a way that will increase the probability they will stay “good” customers. This is accomplished, in part, by ensuring that a customer receives accurate information and has a consistent and satisfying experience every time he/she interacts with the organization.

CRM an Other Customers

While CRM is generally used to manage existing customers, it also has application for other customer groups. For instance, CRM is used to help identify former customers that may hold potential to become customers again. This is often possible due to the amount of information that is obtained and subsequently retained when former customers were considered existing customers. Additionally, CRM can serve an integral role in helping to locate potential customers. As we will explore in the Targeting Markets Tutorial, one method for doing this is to use information contained in CRM to determine important characteristics that are exhibited by existing customer and use this information to pursue new customers in untapped customer markets who have similar characteristics.

CRM and Technology

Computer technology plays a key part in carrying out CRM. A proper technology-based system is needed so that nearly anyone in an organization that comes into contact with a customer (e.g., sales force, service force, customer service representatives, accounts receivable, etc.) has access to necessary information and is well prepared to deal with the customer. But CRM is not only about utilizing high-tech products. CRM requires a strong organizational commitment that includes extensive training for all employees.

Other Issues With CRM

While maintaining close and consistent relationships with customers through all contact points makes good business sense, accomplishing this has often been a challenge. Numerous problems, from technology failures and lack of communication between contact points as well as lack of adequate employee training or outright employee resistance, have derailed many CRM efforts. So while CRM is now widely adopted and is becoming an essential tool for most business organizations, it still has a long way to go before it is ingrained as an essential business function within most organizations.