Listening to customers must become everyone’s business. With most competitors moving ever faster, the race will go to those who listen and respond more intently”.
Tom Peters, Thriving on Chaos
Chapter 1: Conceptual Framework for CRM
What is Customer Relationship management?
Before we begin to examine the conceptual foundations of CRM, it will be useful to define whatis CRM. A narrow perspective of customer relationship management is database marketingemphasizing the promotional aspects of marketing linked to database efforts.Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in whicha variety of aftermarketing 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 individuals consumers and to continuously strengthen the network for mutual benefit of both sides, through interactive, individualized and value-added contactsover 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 byInfoquest.The conclusions of the study were:
A Totally Satisfied Customer contributes 2.6 times as much revenue to a company as aSomewhat Satisfied Customer.