UNIT 1

CUSTOMER RELATIONSHIP
MANAGEMENT
READ THESE STATEMENTS (1-8). WHICH
OF THE FIVE EXTRACTS (A-E) DOES
EACH STATEMENT REFER TO?
1 By changing management organisation, companies can sell a wider range of
products to the same customers .
2 CRM combines customer care with consumer research.
3 It is a mistake to reduce spending on customer relationships when money is
short.
4 CRM should be seen as a long-term activity.
5 Technology can be used to create a similar relationship with customers to one
that existed in the past.
6 The ultimate purpose of consumer research is to create a long-term
relationship with the customer.
7 Consumers give priority to quality over processes.
8 Companies concentrate too much on product innovation and not enough on
attracting new customers.
A
Customer relationship management (CRM) is a business
strategy that helps a company integrate itself and forge a
tight connection with the customer. The promise is that by
using technology and human resources strategically,
businesses can transform themselves into the proverbial
friendly general store - to provide the same levels of 5

customer service that were typical decades ago. But the goal
goes beyond simply satisfying customers. While providing
customer service, clever companies are also gathering data 2

on their customers' buying habits and needs, then storing

and analysing that data and using it to improve products or
services as well as management policies, with the ultimate
aim of turning consumers into customers for life.
6
B
Managing customer relationships is only part of an
overall business system that links internal quality (both
with respect to people and internal processes) to
customer experiences, satisfaction, loyalty, retention
and profitability. This is not on easy undertaking. It
simply can't be the 'project of the month'. To be 4

customer-oriented, organisations must excel at

understanding their customers and providing them
with improved goods and services.
C
Unfortunately for telecoms companies, how they handle even the most
general customer queries remains the cause of the most dissatisfaction.
Consumers' greatest angst is one of astounding simplicity: that
customer-care representatives do not have all the required information
to hand. According to our research, 87% of operators said bill inquiries
were amongst the top three most common queries they received. The
implication is that companies need to urgently reassess their customer-
care and billing systems to address this significant shortfall in
delivering up-to-date information to the customer. The customer is 7
more interested in service than the technology that delivers it. By
reversing the current dissatisfaction in the telecoms industry,
companies can really begin to address their profit margins and secure
their future.
D
Most senior executives say their companies should be
customer-focused. Yet when budgets are tight, some of the
first expenditures to be cut are for marketing and IT, both 3

of which are supposed to help companies better understand

and serve customers. While investors implicitly value
product-development and R&D expenditures, considering
them assets that are potentially useful over a long period of
time, they undervalue marketing and customer-acquisition
costs.
E
Our view of customer-based strategies suggests that
companies should organise around customers rather than
products. A bank should not have one manager for checking
and savings accounts, another for Investments and a third for
credit cards. Such an organisational structure makes it 8

difficult to comprehend the total value of a customer and

therefore can't capture important opportunities such as 1

cross-selling. Businesses should have customer managers, not

product managers.