CRM AS STRATEGY: AVOIDING THE PITFALL OF TACTICS.
CRM Strategies Rather Than Singular Tactics
In these days, to contend against others, to continue to serve and to keep the customers are the significant factors for the firms. In order to reach their targets they need some new, superior, and effective business course of action. In that sense this course of action points at continuous developments in how customers are served which emphasis customer relation management (CRM). We should not think CRM as a tactic but we should focus on its being long term strategy maintainable market and its intense relationship with customers.
As Bland expresses CRM is the bundling of customer strategies and processes, supported by means of relevant software, in order to improve customer loyalty to provide a competitive edge. That explains us CRM should involve a strategy which is supported by technology (software). In that way the companies will be able to make their customers loyal to them and by doing it they can compete with other companies in the market.
A new paradigm change in position to that CRM has re-oriented marketing activities to underline relationships with individual customers, to develop sustainable competitive advantages (Bauer, Grether and Leach 2002). The idea signifies the creation of long-lasting relationship with each customer. That means if a company manages its customer relationships better than its competitors it can not only keep its customers but also it can attract the attention of new customers as well.
The Present Condition Of CRM
CRM is not a new concept. It is stated in the trade books such as The One to One Future (Peppers and Rogers 1993). According to Gordon today most managers believe that CRM is essentially significant to the future of their business. He underlines here the importance of CRM for their future works. Also the companies today invest in technologies to understand customers much more clearly and to take advantage of this awareness about the customers. When they get more information about the customers they can offer products to answer their needs. Yet also firms have committed big amounts of resources to CRM technology. According to the studies nearly 60 % of CRM projects fail to achieve an important return on investment. (Rigby, Reichhed and Dawson 2003; Kale 2003; McKim 2002).
Carrying Out CRM As A Strategy
According to an incorrect common idea, CRM is tied up with “technology”. Than means CRM is something like a tool that we can buy and implement to our works without showing any effort. This misunderstanding brings the failure of CRM because those applications fail to advance to customers the real benefits that are attributable to CRM. Yet when we look at the successful companies we see that they adapted their CRM with strategies “only” technology. They shaped their CRM programme in a way of showing responsibility to the customer needs and wants. They used technology to find out the customer need and then they decided which strategy they should follow. That means they see CRM as an integral part of formulating a clear business strategy that balances there units: technology, process and people. Not only a singular factor they need but also the way to success brings those there concepts with a balance.
Also planning is one of the significant parts of CRM. To be successful the companies should put strategy before software (technology). The absence of strategy (planning) is the reason for the “failure of CRM”. Although strategic planning is important, some managers still think CRM as “tactics-driven”. Yet we see that researches emphasis that CRM is a strategy to build a long term customer loyalty. In other words, according to Gordon, if a company faces difficulties about CRM strategies, there may be no coherent strategy for moving the company ahead so the company should reshape their strategy and make it coherent with the other factors such as process, people and technology.
“Successful businesses, like Dell Inc. or Walmart, know exactly which customer they want and how valuable they are” (Rigby Reichheld and Dawson 2003, p2). This quotation explains that these successful companies know about their customers. They are aware of their needs and they show interest to them. In that way customer feels that they are important and valuable. Also they want to exceed those customers’ expectations and they manage to keep their customers with their CRM strategies. This also underlines that they answer the expectations of the customers so that they can keep the customers. On the other hand if a company doesn’t know which customers are their target customers, they formulate their strategies that neither cogent nor focused. That shows they lose ground to competitors by appealing to too many segments (Rigby Reichheld and Dawson 2003).
To accomplish a successful CRM strategy, a company “should act” as follows.
1) They should be aware which customers are their customers.
2) They should know what makes servicing these customers “profitable”
3) They should learn the reason why the customers buy from them but not from others
4) They should examine in which percentage their customers are in the market by means of profitable work.
5) They should investigate if they can find customers like them (target customer)
6) They should focus on what to do to keep the customers and to do more business with them.
7) They should work on how they can reduce the serving cost but still profitable to the customer.
With the example of Dell Inc and the others, in the light of above mentioned information, if a company’s strategy applies to above questions, there is no doubt for it to be successful.
Future Of CRM
Technology is moving too fast. While it advances, CRM must be integrated into strategy as it becomes available. In time there will be renewals, differentiations, new technologies but we should not forget that CRM is a journey, not a final destination. That means we will never be able to reach any result – there is nothing like a result in CRM. Yet we will always investigate, search and seek for it. This is the core of CRM.
Also as the technology moves forward customers had opportunity to reach more information through Internet (WWW). In this manner they are able to reach many many products. We can say that in the future companies will have to conduct marketing operations in a manner that does meet customers’ expectations. To say in other words they have to become more customer-centric than they may have been in the past.
Internet based customer relationship management (ICRM) is also a new revolution. As I mentioned above, the customers can see the wider picture with the advance technology (Internet). When we look at ICRM it can be fundamental and it is successful way of business since customers demand more and more knowledge from the companies. ICRM is a way for an organization to create, capture and use again the knowledge to achieve its objectives. In this way the companies will use these concepts (mostly) in the close future.
To sum up I would like to signify that we should not see CRM as tactics but we should see it as a strategy – as a whole. CRM is composed of strategy, technology, planning, process and being aware of customer needs. Also we are all aware that the technology is advancing and to become a successful company companies should deliver knowledge management to their customers on deman; ANYTIME & ANYWHERE. A circle may be a good example for it: There is never an end in a circle; but there is always a movement since we don’t know where the circle starts and ends. It is an action never comes to an end. Like a circle CRM should fall into step with customers in every dimension.
Ercan OĞUL
107604033
Source: Marketing Management Journal; Fall2006, Vol. 16 Issue 2, p147-154, 8p
To read the original article, please click on;
No comments:
Post a Comment