Section IConceptual Framework for CRM
What is Customer Relationship management?
Customer relationship management is creating a team relationship among sales, marketing, andcustomer support activities within an organization.Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in whicha variety of after marketing tactics is used for customer bonding or staying in touch after the saleis made.Shani and Chalasani define relationship marketing as
“an integrated effort to identify,maintain, and build up a network with individual consumers and to continuouslystrengthen the network for mutual benefit of both sides, through interactive, individualizedand value-added contacts over a period of time”.
The core theme of all CRM and relationship marketing perspectives is its focus on co-operativeand collaborative relationships between the firm and its customers, and/or other marketingactors.CRM is based on the premise that, by having a better understanding of the customers’ needs anddesires we can keep them longer and sell more to them.Growth Strategies International (GSI) performed a statistical analysis of Customer satisfactiondata encompassing the findings of over 20,000 customer surveys conducted in 40 countries byInfo quest.The conclusions of the study were:
A Totally Satisfied Customer contributes 2.6 times more revenue to a company as aSomewhat Satisfied Customer.
A Totally Satisfied Customer contributes 17 times as much revenue as a SomewhatDissatisfied Customer.
A Totally Dissatisfied customer decreases revenue at a rate equal to 1.8 times what a TotallySatisfied Customer contributes to a business.