Customer Relationship Management (CRM

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In 1876 the English novelist, George Eliot, wrote that, “Of a truth, knowledge is power.” Now, over a century later, that observation still holds true. Knowledge gives us, as individuals, the power to grow, to better ourselves, and to succeed in our endeavours. In the business world also, knowledge is power. As with individuals, knowledge is what enables businesses to grow and to succeed. Contained within every business is a wealth of knowledge about its policies and practices, and about the industry that it serves. A business uses this knowledge to sell and support the products and services that it offers.

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What is CRM?
CRM has been defined in a variety of different ways:
• A way to identify, acquire, and retain customers • A way of automating the front office functions of sales,

marketing, and customer service • For some vendors, whatever their current product may be, that is CRM!

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CRM Perspectives
This diversity of definitions is a result of differences in perspectives: • The first is based on a business perspective of increasing competition that is driving companies to focus on their customers. • The second is based on the relatively new phenomenon of the integration of previously separate applications such as Sales Force Automation and Customer Service Support into Enterprise Applications. • The third is a result of software vendors re-positioning their information technology products and services under the CRM umbrella, to take advantage of the fast growth of the CRM market.
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CRM Definition
CRM is a technology-enabled business strategy whereby companies leverage increased customer knowledge to build profitable relationships, based on optimising value delivered to and realized from their customers.

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Business Priorities
In the May 2000 issue of CIO Canada, it was reported that a study by Andersen Consulting showed that business leaders' top priorities were: • attracting new customers (cited by 86 per cent of respondents) • enhancing productivity (84 per cent) • reducing costs (81 per cent) • improving customer service (77 per cent) • securing access to new markets (60 per cent)

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CRM is about creating value for customers.
• •

CRM itself is a not a technology, even though technology is required to enable CRM. Technology makes it possible to integrate the large volumes of customer information that are required for CRM, and to efficiently transform this information into useful knowledge. Technology also enables a company to interact with its customers in ways that provide value to the customer, as well as make it easier for the customer to do business with them. However, leveraging this customer knowledge to make better business decisions and to be responsive to customers, remains the responsibility of individual managers and workers at all levels within the company.
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Fundamental Concepts
CRM is based on a number of concepts about today's marketplace:
• Changing Customer Expectations; • The Nature of the Customer Relationship; and • The Difference between Loyalty and Captivity

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Changing Customer Expectations
Following a CRM strategy is about evolving a business along a number of dimensions: • From being focused on making and selling products to sensing customer needs and responding with targeted product and service offerings. This should be reflected in "Knowing your customer" and "Increasing value-add" components of the strategy. • From mass marketing (e.g. TV) to marketing to segments of one (e.g. through personalized Web portals). This should be reflected in a "Customer interaction" component of the strategy. • From business-centric interactions designed for the business's efficiency and convenience to customer-centric interactions designed for the customer's efficiency and convenience. This is another aspect of "Customer interaction".

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Outcome: Increased Customer Knowledge
A key dimension of customer knowledge is profitability, since the underlying premise is that the ultimate objective is increased profits. In addition to customer profitability, other knowledge that is needed relates to providing increased value to the targeted segments of profitable and potentially profitable customers: • what kinds of relationship will add value, e.g. loyalty programs; • what is the value perception of the customer segments and how can the value be enhanced by marketing, e.g. Coke and Nike; • what products and services, and what mode of delivery, have value, e.g. stock market alerts via a Web-enabled cell phone; • what were customers' responses to marketing and sales campaigns?

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