CUSTOMER RELATIONSHIP MANMAGEMENTLEARNING ASPECTSEvaluation of CRMSchools of thought in CRMBenefits of CRMCustomer loyaltySuccess factorsService levelsService level agreements1. INTRODUCTIONEVALUATION OF CUSTOMER RELATIONSHIP MANAGEMENT

Customer Relationship Management (CRM) is to create a competitive advantage bybeingthe best at understanding, communicating, delivering, and developing existingcustomer relationships, in addition to creating and keeping new customers. It hasemerged as one of the largest management buzzword. Popularised by the business press andmarketed by theaggressive CRM vendors as a panacea for all the ills facing the firms andmanagers, it means different things to different people. CRM, for some, means oneto one marketing while for others a call centre. Some call database marketing asCRM. There are many others who refer to technology solutions as CRM. If so, whatis CRM?Merchants and traders have been practicing customer relationship forcenturies. Theirbusiness was built on trust. They could customize the products and all aspects of delivery and payment to suit the requirements of their customers. They paidpersonal attention to their customers, knew details regarding their customerstastes and preferences, and had a personal rapport with most of them. In many

cases, the interaction transcended the commercial transaction and involved socialinteractions. Even today, this kind of a relationship exists between customers andretailers, craftsmen, artisans – essentially in markets that are traditional, small andclassified as pre-industries markets. These relationship oriented practices have changed due to industrialrevolution.. Businessesadopted mass production, mass communication and massdistribution to achieve economicsof scale. Manufactures started focusing onmanufacturing and efficient operations to cutcosts. Intermediaries like distributors,wholesalers and retailers took on the responsibilitiesof warehousing, transportation, distribution and sale to final customers. Thisresulted ingreater efficiencies and lower costs to manufacturers but brought in many layersbetweenthem and the customers. The resulting gap reduced direct contacts and had anegativeimpact on their relationships. The post-industrial era saw the re-emergence of relationship practices. Marketingacademicians.(a) Rapid advances in technology,(b) Intensive competition in most markets,(c) Growing importance of the service sector, and(d) Adoption of total quality management programs

Figure 1.1

The Evolution of Relationship Orientation

Technological Advancement

More information, communication and production technologies have helpedmarketerscome closer to their customers. Firms operating in diverse sectors ranging frompackagedgoods to services started using these technologies to know their customers, learnmoreabout them, and then build stronger bonds with them through frequentinteractions.Marketers could gain knowledge about customers, which helped them respond totheirneeds through manufacturing, delivery, and customer service. Technology alsoenabledordering and product-use related services. Though the emergence of CRM in recent times coincided with the information age,onemust remember that technology is just an enabler. Technology enabled marketersovercome