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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 todefine what is CRM. A narrow perspective of customer relationship management isdatabase marketing emphasizing the promotional aspects of marketing linked to databaseefforts.Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention inwhich a variety of aftermarketing tactics is used for customer bonding or staying in touchafter the sale is made.Shani and Chalasani define relationship marketing as “an integrated effort to identify,maintain, and build up a network with individuals consumers and to continuouslystrengthen the network for mutual benefit of both sides, through interactive,individualized and value-added contacts over a period of time”.The core theme of all CRM and relationship marketing perspectives is its focus on co-operative and collaborative relationships between the firm and its customers, and/or other marketing actors.CRM is based on the premise that, by having a better understanding of the customers’needs and desires we can keep them longer and sell more to them.Growth Strategies International (GSI) performed a statistical analysis of Customer satisfaction data encompassing the findings of over 20,000 customer surveys conductedin 40 countries by Infoquest.The conclusions of the study were:
A Totally Satisfied Customer contributes 2.6 times as much revenue to a company asa Somewhat Satisfied Customer.