Maryam Azmat

 CRM, is defined as the customer-oriented

approach of a business that comprises of
analysis, planning, controlling and co-
ordinating of the relationship between a
company and its customers.
 the relationship is developed by means of
various state-of-the-art technologies
required for information gathering and
database maintenance Buttle (2008).
 According to Siems (2010), it is viewed as the
combination of three key elements i.e. customer
strategies, technology and business processes;
when these three aspects are taken into account,
an organization can get in-depth information
about its customers and achieve much enhanced
customer loyalty and increased profitability.
 According to Liu (2005), the successive CRM
implementation process comprises four key
features i.e. keeping a close focus on the key
customers, developing effective CRM plans in
accordance with the customers’
requirements, proper knowledge
management processes so that information
can be stored and used and applying
technology within the organisation that
supports CRM based strategies.
When Unilever realized that its Sunsilk
customers were unhappy with the
shampoo packaging, launched new
packaging in about a month to meet
the demands of the customers. In
order to create new image in the
customer’s minds, it engaged in
various CRM activities such as
organizing events like fashion shows,
and allowing the customers to avail
free hair wash opportunities. Hence,
when effective CRM activities are
designed, only then the companies
are able to attract the customers,
develop great relations with them and
retain them for long period of time.
 Customers are the heartbeat of
all businesses; therefore,
developing a healthy
relationship with them is
important for the success of
your business. Through good
and bad times, maintaining a
healthy customer relationship
with all your clients will help in
sustaining the performance of
your business.
 It Reduces Churning of Customers:
According to recent studies relating to customers, the
findings states that the consumers do not churn as a result of
the price, but they churn due to poor customer care services.
Ensuring that your clients get the satisfaction, they are
looking for reduces their chance of churning.

 CRM helps businesses build a relationship with their

customers that, in turn, creates loyalty and customer
retention.
 You Will be Able to Establish New Connections
Developing a relationship with clients is imp for
improving the way they relate to your company.
You should ensure that there is a steady flow of
information on deals, events, and products via
email, websites or social media to guarantee a
continuous connection to your business.

 Strong relationships show how they will make their

future purchases
Customer lifetime value is the metric that
indicates the total revenue a business can
reasonably expect from a single customer
account.

The longer a customer continues to purchase

from a company, the greater their lifetime
value becomes.
 Calculate average purchase value: Calculate this number by
dividing your company's total revenue in a time period
(usually one year) by the number of purchases over the
course of that same time period.
 Calculate average purchase frequency rate: Calculate this
number by dividing the number of purchases over the course
of the time period by the number of unique customers who
made purchases during that time period.
 Calculate customer value: Calculate this number by
multiplying the average purchase value by the average
purchase frequency rate.
 Calculate average customer lifespan: Calculate this number by
averaging out the number of years a customer continues
purchasing from your company.
 Then, calculate LTV by multiplying customer value by the
average customer lifespan. This will give you an estimate of
how much revenue you can reasonably expect an average
customer to generate for your company over the course of
their relationship with you.
 The average sale for the clothing retailer,
maryam, is $50, and the average customer
shops with them three times per year for two
years. The lifetime value of this customer is
calculated as follows:
Lifetime Value = $50 × 3 × 2
= $300
After calculating the cost of goods sold
(COGS), overhead, marketing, and all other
administrative expenses, Maryam’s profit
margin is 20%.
Customer Lifetime Value = $50 × 3 × 2 × 20%
= $300 × 20%
= $60