Customer Relationship Management Thread

Customer Relationship Management Thread - Customer...

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Customer Relationship Management Explanation 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). While technology is useful in managing customer relationships, CRM is not simply a function of the IT department. Instead, it is “an enterprise-wide set of practices” (Chen, Yen, Li & Chung, 2009, p. 284) 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. Comparison The text defines customer relationship management as “systems that are designed to collect and interpret customer-based data” (Meredith & Shafer, 2007). 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 customers and financial savings. Understanding what customers need can provide a business with a competitive edge over their competitors. Additionally, the retention of customers is important, as “attracting a new customer costs as much as five times more than keeping an existing one” (Chen, et. al., 2009, p. 286). Particularly in turbulent economic times, this can potentially keep a business afloat. Article Summary The article, “Customer Relationship Management—A New Method of Targeting the 21 st Century Consumers” discusses the emergence of Customer Relationship Management (CRM) and its importance to the way business is conducted. The authors define CRM as “a combination of policies, processes, and strategies implemented by an organization to unify its customer
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This note was uploaded on 01/18/2011 for the course BUS 201 taught by Professor Marybethwhite during the Spring '08 term at University of South Florida - Tampa.

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Customer Relationship Management Thread - Customer...

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