Needs and importance of CRM

1. Better service to customers:
With CRM, the company can provide better service to its regular and valuable customers. It is said that 20% of customers account for 80% of the sales. Therefore, it is worth targeting the important customers and then to provide them sophisticated service as compared to other customers.

2. Customize market offering:
Companies can customize a product or service depending upon the data available with the firm. The firm can facilitate customer-company interaction through the company contact center and Web site. Such interaction helps to develop customized products.

3. Reduce the customer defection rate:
CRM emphasizes on training and development of employee to become more customer oriented. Due to CRM training and development, employees show care and concern towards the valuable customers. Therefore, the customer defection rate may be very less.

4. Increases long-term relationship:
Some firms treat their customers as partners, especially in the case of B2B markets. Firms solicit the help of customers to design new products or to improve their service. If the customer gets involved with the firm, he is more likely to remain with the firm. 5. Increases customer equity: CRM increases customer equity. Firms focus the marketing efforts more on the most valuable customers. The main aim of CRM is to produce high customer equity. Customer equity is the sum of lifetime values of all customers. More focus on most valuable customers will enable a firm to increase customer equity.

Competitive advantage: Firms that adopt CRM get competitive advantage in the market. the company is in a position to generate higher return on investment. This is because of repeat purchases on the part of loyal customers. . 8.6. The evangelists spread a good word about the company and its products. 7. They can face the competition with much ease. Corporate image: The image of the firm also gets enhanced. Loyal customers become evangelists. Competitive advantage help to generate higher returns on investment. This enables a firm to get additional customers to its fold. The higher return on investment increases shareholders’ value. Also the company makes money through cross selling (selling many products rather than single product) and up-selling (selling higher value products). Higher return on investment: Due to CRM.

The techniques include the software programmers.  Once the data warehouse locates the data at a central place. . pricing strategies. especially in the case of B2B markets. the data analyses use data mining techniques to examine the mounds of data to find out interesting facts of the customers.  A data warehousing is a companywide electronic database of detailed customer information. MVCs Programmes. The purpose of data warehouse is not just to gather information. promotional techniques. One-to-One Marketing: Some firms adopt one-to-one marketing. and so on. but to place it into a central location for easy access. Data Warehousing and Data Mining : CRM analysts develop data warehousing and use data mining techniques to develop and maintain long lasting relationship with valuable customer. Such firm treat customers as partners.Techniques of building CRM Firms use a number of techniques to build. Firms solicit the help of customers to design new products or to improve their service. maintain and enhance CRM. The mined data can be utilized for various marketing decisions such as:      Product design and modifeation Product pricing Promotion mix Selection of channels of distribution Maintaining dealer relationship etc. Some of the techniques are as follow: 1. he is more likely to remain with the firm. if the customer gets involved with the firm. 2.

Therefore. the firm has to determine the value of its customers. a firm has to find out which of its customers are worth retaining. airlines may offer special discount for frequent fliers. resolving complaints etc. In order to enhance marketing efficiency. For instance. In other words. . They are given priority in after-sales-service. especially in the banking industry.3. and which are not. the firm must be selective. 4. Loyalty Programmes: Firms may use variety of loyalty programmes to retain customers. But it is to be noted that all loyal customers need not be profitable. and accordingly focus on MVCs. Priority Customer Programmes: Some firms introduce priority customer programmes. priority customer programmes are followed by several organizations. and all profitable customers need not be loyal. Firms may also provide gifts. and other benefits to loyal customers. which customers to be given extra care and attention. delivery. The priority customer are the MVCs.