Page 15 - DMGT308_CUSTOMER_RELATIONSHIP_MANAGEMENT

Customer Relationship Management

Notes As per a report published by the American Society of Quality and Arthur Andersen Consulting,
Inc., in 1977, customers tell eight friends about a satisfying experience and 20 friends for a
negative experience; it is easier to influence existing customers to buy 10% more than it is to
increase the customer base by 10%; 80% of successful new product and service ideas come from
existing customers; and, repeat customers cost 1/5 less than new customers, and can substantially
increase profits.
These facts make it very compelling on companies to concentrate their efforts on improving
customer satisfaction, and retaining them. Thus, all types of business need to focus on successfully
developing and effectively managing long-term relationships with their customers.

This is the real import of Customer Relationship Management - a complete business strategy; a comprehensive
approach to creating, maintaining and expanding customer relationships. Customer Relationship
Management is about making the customer the centre of the business and organizing all processes around
him. Thus, we can conclude that CRM is all about ‘customer strategies’- “strategies that act as means for
making each customer more valuable to the company.”
The experience from many companies is that a very clear CRM requirement with regards to
reports, e.g. output and input requirements, is of vital importance before starting any
implementation. With a proper demand specification a lot of time and costs can be saved based
on right expectations versus systems capability. A well operative CRM system can be an
extremely powerful tool for management and customer strategies.

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Caution CRM is not just a technology, but rather a comprehensive approach to an
organization’s philosophy in dealing with its customers.
This includes policies and processes, front-of-house customer service, employee training,
marketing, systems and information management. Hence, it is important that any CRM
implementation considerations stretch beyond technology, towards the broader organizational
requirements. The objectives of a CRM strategy must consider a company’s specific situation
and its customers needs and expectations. The data gathered as a part of CRM must consider
customer privacy and data security. Customers want the assurance that their data is not shared
with third parties without their consent and not accessed illegally by third parties. Customers
also want their data used by companies to provide a benefit to them.
Whether your customers are in the store, online, or on the phone, they expect to get the service
they need promptly and efficiently. Great service improves loyalty and grows top-line revenues.

On the phone, a great experience means answering calls quickly and routing customers to the
right resource immediately, regardless of where that associate may be located.
Online, a great experience means easy access to the right information or resource whether that
information resides in an online repository or through personal interaction with a web agent.
In the store, good service means delighting customers with your brand, store appearance,
merchandising, and knowledgeable and attentive staff on the sales floor.

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