Significance of CRM in Business Organizations
Question:
Discuss about the Client Retention and Brand Image Development by CRM Technology.
This report depicts the importance of developing proper customer relationship management system in the business organizations to build secured relationship between the consumers and the organizations. With the technical excellence of CRM the business organizations will be able to obtain client retention (Dalir et al. 2017). From the business perspectives it can be said that, the performance of the company will be improved through CRM technology.
Marketing is not just about the organizational development but also manages the matter of sales and supply however the continuous development and the effect of after sales services to the consumers with a long term relationship could also be added with the help of Customer Relationship Management system. The role of CRM in business organizations, its goal, benefits are also elaborated below. In addition to this, the factors of customer retention and the KPI of customer retention programs are also illustrated in this report.
In order to develop relationship between the consumer and the service providers since last two to three decades the organizations have started using the concept of Customer Relationship Management (CRM) technology. Both short term and long term strategies are needed to be incorporated to increase their brand value for gaining more number of consumers and also to retain their existing consumers (Garrido-Moreno, Lockett and García-Morales 2014). According to the current market trends, the primary concerns of the companies are no longer to achieve market leadership and conquering market as well inspite of that the organizations should ensure that the contribution of the activities are helping to gain mutually profitable relation with proper consumers (Ascarza et al. 2016). The relationship between the buyers and sellers helps to reduce the rate of negative consequences from the functional and operational activities of the business organizations.
Marketing
Marketing is referred to as a continuous as well as persistence process, implementation and follow up. Marketing plays the most active role for business planning in different ways. In case of market formulae for success, the customer value is the key integrant (Bukhari and Kazi 2016). The product quality and service served by any business organization should be consumer focused so that long term success could be gain eventually. In order to develop an acceptable definition to de-limit the business domain, the features of CRM are needed to be analyzed by the executives of the business organization. It also helps to maintain both the offline and online marketing. Apart from this marketing also helps to build relationship among customers, corporate management, suppliers and competitors. It also helps to gain competitive advantages from the marketplace (Jain and Patel 2016). Moreover, it can be said that CRM helps to define the factors those are useful to understand the different ways to satisfy both the new as well as existing consumers.
Key Factors of Customer Retention
Goal of CRM
After analyzing the operational and functional activities of different business organizations it has been found that, their goal is to obtain effective as well as measurable revenue and competitive advantages simultaneously. The leading objectives rather goal of CRM is to satisfy the consumers through their product and services (Trainor et al. 2014). It also helps to make their service much efficient to attract new consumers and also to retain the existing consumers. The extreme sales approach will also resolve the business gaps. From the value chain analysis model it is found that with CRM technology both the primary stages and supporting condition will move towards business profit and customer retention.
Benefits of CRM
The benefits for which most of the business organizations use CRM as a technology include the following:
- CRM helps the business organizations to grab new consumers and also in customer retention
- Through integrated campaign individual segmentation could be analyzed and also high service level delivery become possible with the help of CRM technology (King, Dhameeth and Kim 2017)
- The business efficiency could be grown efficiently, to increase greater business agility
- It can establish secured relationship between the consumers and the service providers
- It could safeguard the functionality and operation of any business organization (Dalir et al. 2017)
- CRM helps to prevent sensitive information from the external assault
Advantages of customer retention strategy
With the help of Customer retention strategies both the stakeholders and the company owners would be able to gain the following list of benefits:
- It is cheap than acquisition
- It helps to bring more number of loyal consumers so that the business can obtain more profit
- The brand image would be stand out from the crown of business
- The engaged consumers will be able to provide more feedback to the consumers (Bukhari and Kazi 2016)
- Through CRM the consumers will be able to increase the brand loyalty of the organization
Factors of customer retention
The list of critical success factors those are helpful for the company to drive the consumer retention strategies. If the business organizations are willing to upgrade the consumer retention then certain strategic marketing factors are required to be considered by the company executives and the factors are as follows:
- Both the existing and newly grabbed consumers are needed to be analyzed in terms of the satisfaction level and product and service level expectation (Trainor et al. 2014)
- The consumer’s expectation should be managed well
- The consumer’s service is improved in terms of lifetime value
Customer retention as a key to business retention
Customer retention is referred to as a key to business retention as it helps to boost the profitability of the business. Different reasons are there for which customer retention is considered for measurable business success. Customer is a key for the business success due to the following reasons:
- It helps to save money and time as well during the business operation and functionalities
- Profits could be achieved in a repetitive manner
- The process of advertising become easier from the business perspectives
- Te retained consumers are able to serve valuable feedback to the consumers
Figure 1: Customer retention factors
(Source: Dalir et al. 2017, pp-20)
Key performance indicators of customer retention programs
Key performance indicators are used in the business organizations to serve both internal as well as external client’s actionable metrics with easily accessible, customized and effective efficiency to the business operations (Bukhari and Kazi 2016). It helps to measure business goals, vital information, and continuous business success factors. The list of KPI those are necessary for customer retention programs are as follows:
- Financial metrics (Profit, cost, cost of goods those have been sold)
- Customer metrics (lifetime value, satisfaction and retention)
- Process metrics
- People metrics
- Customer metrics
Conclusion
From the overall discussion it can be concluded that with the help f the CRM technology any business organization would be able to build secured relationship between the consumers and the service providers. In the current business world the concept of CRM and its impact in consumer’s loyalty is constantly obtaining huge attention. One of such strategies is focusing on consumer loyalty which is viewed in terms of automakers. In order to gain consumer retention brand loyalty is the most important thing that should be focused on. In order to identify and satisfy the consumers all the significant critical success factors are needed to be analyzed by the project executives so that it could retain their existing consumers and other consumers as well. The profits for which consumers are using CRM technology in the business organization are elaborated. In addition to this, the key performance indicators of consumer’s retention programs are also elaborated in this report.
References
Appel, G., Haenlein, M., Libai, B. and Muller, E., 2017. Customer Retention in a Product Platform World (Doctoral dissertation, University of Maryland).
Ascarza, E., Neslin, S.A., Netzer, O., Anderson, Z., Fader, P.S., Gupta, S., Hardie, B.G., Lemmens, A., Libai, B., Neal, D. and Provost, F., 2016. In Pursuit of Enhanced Customer Retention Management: Review, Key Issues, and Future Directions. Customer Needs and Solutions, pp.1-17.
Bukhari, A.N. and Kazi, R., 2016. CRM triggers effectiveness through Customer Selection Orientation, Business Cycle Orientation, Cross-Functional Integration and Dual Value Creation: Myth or Reality. Journal of Marketing Management, 4(1), pp.163-171.
Dalir, M., Zarch, M.E., Aghajanzadeh, R. and Eshghi, S., 2017. The Role of e-CRM in the Quality of Customer-Bank Relationship. Human Resource Management, 4(2), pp.12-22.
Garrido-Moreno, A., Lockett, N. and García-Morales, V., 2014. Paving the way for CRM success: The mediating role of knowledge management and organizational commitment. Information & Management, 51(8), pp.1031-1042.
Gonzalez-Benito, O., Venturini, W.T. and Gonzalez-Benito, J., 2017. CRM technology: implementation project and consulting services as determinants of success. International Journal of Information Technology & Decision Making, 16(02), pp.421-441.
Jain, Y. and Patel, N., 2016. Analysing impact of online CRM practices on companies productivity and customer retention. International Journal for Research in Business, Management and Accounting, 2(12), pp.25-35.
King, D.M., Dhameeth, G.S. and Kim, J.S., 2017. Modeling Moderating Effects of Customer Lifetime Value (CLV) and Referral Value (CRV) on Customer Service of Frontline Employees for Customer and Organizational Satisfaction: A Comparative Analysis.
Peltonen, H., 2015. CRM system implementation supporting the management of customer relationships.
Shafique, M.N., Ahmad, N., Abbas, H. and Hussain, A., 2015. The impact of customer relationship management capabilities on organizational performance; moderating role of competition intensity. Arabian Journal of Business and Management Review (Nigerian Chapters), 3(3), pp.28-47.
Syed, T. and Jain, R., 2017. A STUDY ON DETERMINANTS OF CUSTOMER RETENTION IN BANKING SECTOR. International Education and Research Journal, 3(6).
Trainor, K.J., Andzulis, J.M., Rapp, A. and Agnihotri, R., 2014. Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM. Journal of Business Research, 67(6), pp.1201-1208
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