Customer Relationship Management
According to Kulpa (2017), Customer Relationship Management (CRM) can be defined as methods, procedures, and tools that organizations use to administer the interaction and communication with their customers.
Most business owners are aware that preserving and maintaining current customers is critical for keeping the sales and maintaining the profits since the cost of finding new customers is much costly rather than retaining the existing customers (Info Entrepreneurs, n.d.).
Therefore, companies need to take care of their interaction with the customers. In this case, CRM supports companies in attaining an awareness of their customers’ behavior that enables them to adjust their company and business operations with the customers’ expectations. (Info Entrepreneurs, n.d.).
Impact of CRM on Customer Retention and Loyalty to Brands
Anderson (2013) stated that CRM accommodates the companies to collect the consumer behavior information that might be useful to design a long-term business plan. This information also can be utilized to construct customer loyalty to the brand. As it makes sense that constructing a favorable brand image for target customers is one of the most critical approaches to win loyalty from the customers (Anderson 2013).
In addition, CRM aids the companies to raise and strengthen the relationship with their customers so that it can provide strong customer loyalty and preserve a high customer retention rate (Kulpa, 2017). For example, Apple’s CRM strategy is collecting its personal customer behavior data through the Apple ID. So every time the customer use Apple services such as App Store, Itunes, iCloud, etc, Apple will retain the data so that they know what is the personal preferences of each user, let say, their music and movies preferences. By acquiring these personal consumers’ data, Apple can use a customized marketing approach to each of its customers based on their online behavior (Singh, 2020).
Furthermore, in an environment with strong competition, a company has to compete with each other to get every single customer’s attention and loyalty. Supplying good products is not enough to retain and gain customers’ loyalty. Companies have to create an authentic brand to maintain the conformity between the customers and the brand to form a long-term relationship (Hart & Kassem, 2012).
Importance of e-CRM
According to Technopedia (2016), e-CRM or Electronic Customer Relationship Management is the term for the utilization of Internet-based technologies in marketing communication channels to accomplish the objectives of CRM.
In the present day, the social transformation has changed the way customers communicate. Nowadays, people spend their time more on the internet, allowing them to get information faster conveniently. Hence, companies have to modify their CRM approach into a more effective way to reach out to more customers (Hart & Kassem, 2012). e-CRM heighten the performance of the marketing processes as well as the customers’ interactions, thus supports the companies to adapt and personalize their products and/or brand to meet their customers’ needs (Technopedia, 2016)
One of the best e-CRM strategies example is Coca-Cola CRM. Singh (2020), mentioned that Coca-Cola has successfully developed partnerships with relevant organizations or celebrities based on the data they obtained from the CRM software.
Customer Gap under Customer Orientated Marketing Strategy
Mack (n.d.) defined customer orientated marketing strategy as a strategy in which companies devise their products based on the customers’ needs. However, nowadays, the customers are more and more exacting. Therefore, the companies have to analyze the customer gap under its customer-orientated marketing strategy (Buckley, 2018).
Buckley (2018) explained that the customer gap is the gap between customer expectations and perceptions. Customer expectation is what customers request or require gaining from the products/services based on the accessible resources, culture, way of living, character or traits, demographics, ads, past experiences, and information available. Whereas, customer perception can be determined based on the personal customer’s interaction with the products or services (Buckley, 2018).
Buckley (2018) added that a company can close the gap in a customer-oriented strategy by analyzing the gap of customers’ expectations and perceptions. Thus, enable them to provide excellent services based on their knowledge of the target market.
Conclusion
CRM enables the companies to maintain customer retention and loyalty, as it is crucial to have strong customer loyalty to the brand for the companies to survive in a competitive marketplace. e-CRM can be utilized as an efficient tool to close the customer gap in a customer-oriented marketing strategy.
References
Anderson, P. (2013, March 11). How CRM can help promoting brand loyalty. Business 2 Community. https://www.business2community.com/loyalty-marketing/how-crm-can-help-promoting-brand-loyalty-0431454
Buckley, L. (2018, April 9). Customer service GAP model. Acumen.sg. https://acumen.sg/customer-service-gap-model/
Hart, S., & Kassem, G. (2012). Social customer relationship management — From customer to friend. European, Mediterranean & Middle Eastern Conference on Information Systems. 75–88. https://www.researchgate.net/publication/267266211_SOCIAL_CUSTOMER_RELATIONSHIP_MANAGEMENT_-_FROM_CUSTOMER_TO_FRIEND
Info Entrepreneurs. (n.d.). Customer relationship management. Info entrepreneurs | Info entrepreneurs. https://www.infoentrepreneurs.org/en/guides/customer-relationship-management/
Kulpa, J. (2017, October 24). Why Is Customer Relationship Management So Important? Forbes. https://www.forbes.com/sites/forbesagencycouncil/2017/10/24/why-is-customer-relationship-management-so-important/?sh=1057c847dacd
Mack, S. (n.d.). Customer-oriented marketing strategy. Small Business — Chron.com. https://smallbusiness.chron.com/customeroriented-marketing-strategy-65737.html
Singh, R. (2020, May 20). Top 5 customer relationship management examples. appvizer.com. https://www.appvizer.com/magazine/customer/client-relationship-mgt/customer-relationship-management-examples
Technopedia. (2016, September 28). What is electronic customer relationship management (E-CRM)? — Definition from Techopedia. Techopedia.com. https://www.techopedia.com/definition/30914/electronic-customer-relationship-management-e-crm
Note:
This article is written based on University of The People Marketing Management (BUS 5112) written assignment by Fristy Tania in October 2021
