Customer Relationship Management
Customer Relationship Management (CRM) is a relatively new concept that brings a
focus on customer relationships to the forefront of business operations.
CRM can be defined as
“the combination of marketing efforts, business practices and technology that allows the firm to
understand its customers from multiple perspectives” (Chang & Ku, 2009, p. 329).
technology is useful in managing customer relationships, CRM is not simply a function of the IT
Instead, it is “an enterprise-wide set of practices” (Korsakine, 2009, p. 54) that must
be embraced by every department in order to achieve full potential.
“CRM takes advantage of information technology (IT), and gains greater insights into
customer needs, behaviors and expectations by developing and maintaining interactive one-on-
one relationships with them” (Chen, Yen, Li & Chung, 2009, p. 283).
These relationships are
vital in today’s increasingly competitive business world.
“Customers have come to expect that
they will be dealt with in a meaningful and personalized fashion” (Wood, 2009, p. 93).
Organizations that do not maintain good relationships with their customers run the risk of losing
those customers to competitors.
The text defines customer relationship management as a process of “managing all aspects
of a customer’s relationship with an organization to increase customer loyalty and retention and
an organization’s profitability” (Baltzan & Phillips, 2010, p. 28).
Research on the topic provides
nearly identical definitions and descriptions of the term.
Both the text and additional research
stress that CRM is not solely a technology function, but rather “CRM practices take full
advantage of technological innovations that enable the collection of necessary data to determine
the economics of customer acquisition, customer retention and lifetime value” (Chen, et. al.,
2009, p. 285).
Thus, while “there are many technical components of CRM, it is actually a
The text and further research demonstrate that implementation of CRM results in loyal