Customer Relationship Management Research Paper

Customer Relationship Management Research Paper

Customer Relationship Management (CRM) employs people, technology, tools, processes and activities to increase customer retention and a firm’s profitability. Early CRM use was fraught with problems, as many firms applied CRM inappropriately. In recent years, however, firms have become selective and prudent with their CRM investments, and many of them are now reporting success with CRM.

WRITE THIS ESSAY FOR ME

Tell us about your assignment and we will find the best writer for your paper.

Get Help Now!

Keywords CRM System; Customer Defection; Customer Relationship Management (CRM); Customer Retention; Customer Segmentation; Lifetime Value; Relationship Marketing; Win Back

In recent years, management thinking has shifted from a focus on acquiring new customers to an understanding of the importance of retaining customers and the need to build up loyalty among these customers (Fitzgibbon & White, 2005). It has been recognized that a company’s relationship with its customers is one of its most important assets, and this is all the more important in today’s climate of high customer turnover, decreasing brand loyalty, and lower profitability. As a result, many organizations are moving away from product-centric and brand-centric marketing, toward a customer-centric approach.

Customers are increasingly viewed in terms of their lifetime value to a firm, rather than being measured simply on the value of an individual transaction. Since customers usually engage in many different types of transactions, and since they vary a great deal as to their wants and needs, firms find the management of their relationships with customers very challenging. Customer Relationship Management has emerged as a way of dealing with the challenges thus posed.

Customer Relationship Management (CRM) evolved out of the field of relationship marketing, which is based on the premise that lifetime connections with customers are more rewarding and advantageous than a short-term transaction-based relationship. Relationship marketing, which became popular in the 1990s, views the customer as an asset that can be controlled, and one that needs an adequate amount of investment, similar to the requirements of tangible assets (Ryals & Payne, 2001). As such, customer retention therefore produces a major foundation of relationship marketing.

Also referred to as customer relationship marketing and customer loyalty marketing, CRM employs information technology to enforce and execute relationship marketing approaches. Through CRM, marketing appears to have come full-circle in its evolution: from straight sales to mass marketing, to target marketing, to relationship marketing, and now to CRM, which is on the way to completely allowing true one-on-one marketing (Landry, Arnold & Arndt, 2005).

“CRM is based on the belief that developing a relationship with customers is the best way to make them loyal, and that loyal customers are more profitable than non-loyal customers” (Dowling, 2002, p. 87). It is also believed that tiny improvements in customer retention rates can yield significant increases in profits. The goal is to bring about increased customer retention. According to Hamid & Akhir (2013), technology based CRM is often implemented but not integrated in customer experience or exploited t…………………………