Customer Relationship Management

I.CUSTOMER RELATIONSHIP MANAGEMENT

INTRODUCTION

Looking back at the evolution of the companies and markets from the last 50 years, we understand why we need Customer Relationship Management. Companies have evolved from a structural point of view, including goods and services supply and their strategies. After WWII, the orientation towards production was predominant, due to post-war lack of goods and services; in the 60’s, a progress was made in the direction of quality investments, while the 70’s brought in front the market orientation, as companies produced on demand, goods which were easily sold. The offer explodes, and thus, competition and competitve strategies become the main way of thinking of the 80’s.

The next decade brings the first signs of market saturation, which makes the companies decide to focus mainly on the customer and on his/her desires. The systematic research of the customer’s needs and the acceptance of the fact that the customer is the one who directly influences the company’s existence have brought the relationship between the company and its customers to a never reached before level, thus, today no company can afford to ignore its customers’ opinion in taking decisions.

A. Concept Of Customer Relationship Management (CRM)

Customer relationship management (CRM) has been around for the last 30 years, but it became very important when companies changed their attitude towards customers. Therefore, customer relationship management will be concerned with the way of approaching the client, with constructing the dialogue with him/her and with preserving a long-term relationship.

Customer relationship management appears to be a topic that is high on the agenda of most of general, commercial and IT managers, enabling their organizations to become accessible to large groups of customers. The realisation of an infrastructure that enables customer and supplier to communicate with one another, freed from the constraints of place and time, remains a formidable challange. Customer relationship management requires organisational adjustments which should incorporate the appropriate culture, structure and procedures.

In order to better illustrate the definition of CRM, we have to present several approaches of this concept.

One of these definitions originates from the Metagroep, which, in 2000, defined CRM as “the automation of horizontally integrated business processes involving front office customer contact points (marketing, sales, service and support) via multiple, interconnected delivery channels”. In this description, CRM is positioned in the “IT corner”. Technology facilitates or makes customer contact possible between employees from departments via Internet, telephone and “the face-to-face” channel.

An entirely different definition suggests that CRM is “a process that addresses all aspects of identifying customers, creating customer knowledge, building customer relationships, and shaping their perceptions of the organisation and its products”. The role of technology is not even mentioned in this definition. It appears that we would like to get to know the customer and develop a relationship with him or her, not only being interested in closing a deal. We feel it is important that the customer’s and supplier’s interest in one another covers a longer period of time than simply the moment of the transaction, and that this interest also goes deeper than the purchase and the sale.

In comparison with the previous defintion, CRM is not postulated as a process but as a business strategy: the intention that organisations have in mind for CRM is made explicit: on the one hand, the goal is to increase revenue and profit, and on the other it is to improve customer satisfaction. The Gartner group’s definition goes a step further, describing CRM as “an IT enabled business strategy, the outcomes of which optimise profitability, revenue and customer satisfaction by organising around customer segments, fostering customer-satisfying behaviours and implementing customer-centric processes”.