Page 194 - DMGT205_SALES_MANAGEMENT

Sales Management

Notes 12.5 Understanding Customer Relationship Management (CRM)

CRM is a business philosophy based on upon individual customers and customised products
and services supported by open lines of communication and feedback from the participating
firms that mutually benefit both buying and selling organisations . The buying and selling
firms enter into a "learning relationship ", with the customer being willing to collaborate with
the seller and grow as a loyal customer . In return,, the seller works to maximize the value of the
relationship for the customer's benefit . In short, CRM provides selling organisations with the
platform to obtain a competitive advantage by embracing customer needs and building value-
driven long-term relationships.

Task What should the focus and main activities of a global salesperson be in each stage
of the relationship development process? Why? (Justify your answer)
12.6 Determinants of CRM

Trust: The willingness to rely on the ability, integrity, and motivation of one company to serve
the needs of the other company as agreed upon implicitly and explicitly.

Value: The ability of a selling organisation to satisfy the needs of the customer at a comparatively
lower cost or higher benefit than that offered by competitors and measured in monetary, temporal,
functional and psychological terms.

In addition to trust and value , salespeople must: Understand customer needs and problems;
Meet their commitments; Provide superior after sales support; Make sure that the customer is
always told the truth (must be honest); and Have a passionate interest in establishing and
retaining a long- term relationship

Self Assessment

Fill in the blanks:
1. ....................... focuses on long term profits and it ignores the view of acquiring customers
for single transaction to earn a little profit at present.

2. Company should spend for the profitable ....................... and serve them better at the expense
of present profits to earn long term profits in the future.
3. The willingness to rely on the ability, integrity, and ....................... of one company to serve
the needs of the other company as agreed upon implicitly and explicitly.
4. The Early Stage Experience is accumulated between the buyer and ....................... although
a great degree of uncertainty and distance exists.

5. The ....................... between the companies becomes institutionalized.
6. The ultimate outcome of a ....................... CRM strategy is the creation of a unique company
asset known as a relationship network.

7. A ....................... network consists of the company and its major customers with whom the
company has established long and enduring business relationships.
8. CRM is a new business philosophy based on ....................... and value.

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