CRM is concerned with the creation, development and enhancement of individualised customer relationships with carefully targeted customers and customer groups resulting in maximizing their total customer life-time value.
CRM is a business strategy that aims to understand, anticipate and manage the needs of an organisations current and potential customers.
It is a comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology.
CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers.
The expression Customer Relationship Management (CRM) is becoming standard terminology, replacing what is widely perceived to be a misleadingly narrow term, relationship marketing (RM).
The Purpose of CRM
The focus of CRM is on creating value for the customer and the company over the longer term.
When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs.
CRM enables organisations to gain competitive advantage over competitors that supply similar products or services.
Benefits of CRM include
Reduced costs because the right things are being done (ie., effective and efficient operation).
Increased customer satisfaction because they are getting exactly what they want (ie. meeting and exceeding expectations).
Ensuring that the focus of the organisation is external growth in numbers of customers.
Maximisation of opportunities (eg. increased services, referrals, etc.).
Increased access to a source of market and competitor information.