Page 192 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes 12.1 Aim

There are Four aims of CRM
1. Focus on long term profits: CRM focuses on long term profits and it ignores the view of
acquiring customers for single transaction to earn a little profit at present. Company
should spend for the profitable customers and serve them better at the expense of present
profits to earn long term profits in the future.
2. Retention of customers: It is proved that the retention of existing customers is cheaper
than attracting new customers. Attracting new customers involve high cost such as
advertising but retention cost such as serving the customer is considered to be less. But
many firms fail to recognize this and refrain from retention strategies.

3. Customer welfare at profit: CRM says that the chosen profitable customers should be
served at the expense of present profits which will bring better profits in the future
through a loyal customer base who will not switch to competitors. Company should
provide welfare/services to customers and build long lasting relationships with customers
and loyalty should be built from basic level to a partnership level.
4. Developing the strategy: CRM should be incorporated in to business and marketing
strategies to yield better results and entire organization should be dedicated to serve
profitable customers at the expense of profits today to earn better profits tomorrow.
Point to note is that CRM is not a new concept to the business world but use of CRM has
increased during past decade.
CRM process can be visually represented as follow:

Customer
Customer
Relationship Customer Loyalty/ Organisation’s
Management Satisfaction Customer Performance
Retention

CRM does not focus on profit from a single transaction rather it focuses on achieving
better profits in long term by understanding chosen customers and creating value for
them. Through CRM customers gets satisfied and will be bound to retain with the organization
leading to better organization process and value creation process is a crucial element in creating
loyalty.

Did u know? CRM consists of three main phases that help maintain relationships between
a business and its clients. These include the planning phase, assessment phase and execution
phase. The planning phase is used to plan new campaigns and approaches toward customers,
using marketing tools and software.

12.2 Features of CRM

1. Focus on customer rather than revenue from single transaction.
2. Creating customer value rather than just adding features to the product.

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